P u b l i c a t i on 9 0 1 ( A pr i l 2 0 0 9 )

P a g e 3 5

Table 1.

Tax Rates on Income Other Than Personal Service Income Under Chapter 3, Internal Revenue Code, and Income Tax Treaties

Income Code Number 1 2 3 6 7 9 10 11 12 13 14 21Dividends Copyright RoyaltiesRealPropertyInterest Paid IncomeInterest Paid Interest on to a Paid by U.S. Qualifying andby U.S. Real Controlling Corpora- for Direct Motion Natural Pensions SocialObligors Property Foreign tions— Dividend Capital Industrial Pictures and Resources and SecurityName Code General Mortgages Corporation General

Rate

a,b

Gains

Royalties Television Other Royalties

Annuities Payment

Australia . . . . . . . . . . . . AS

g,tt,uu

g,ff,tt,uu

g,tt,uu

g,pp

g,pp,xx

5 30

0 30Austria . . . . . . . . . . . . . AU

g,m

g,m,ff

g,m

g,x

gxl

g,l

0 30 0 30Bangladesh . . . . . . . . . . BG

g,m,yy

g,m,ff,yy

g,m,yy

g,pp

10 30

d,f,q

0 30Barbados . . . . . . . . . . . BB

g,x

g,l

5 30

d,f

0 30Belgium . . . . . . . . . . . . BE

g,m

g,m,ff

g,m

g,zz,ab

g,xx,zz,ab

g,l

0 30

d,f

0 30Bulgaria . . . . . . . . . . . . BU

g,m,uu,zz

g,m,ff,uu,zz

g,m,uu,zz

g,zz,ab

g,,zz,ab

g,l

5 30

d,f

0 30Canada . . . . . . . . . . . . . CA

g,m

g,m,ff

g,m

g,pp

0 30 15 0China, People’s Rep. of . . CH

10 30

g,w

10 30

d,mm

0 30Commonwealth of

0 30 30 30 30

0 0 0 0 30 30 30Independent States . . .Cyprus . . . . . . . . . . . . . CY

g,l

0 30

d,f

0 30Czech Republic . . . . . . . EZ

g,x

g,l

0 30

d,f

0 30Denmark . . . . . . . . . . . . DA

g,oo

g,ff,oo

g,oo

g,zz,ab

g,xx,zz,ab

0 30

d,mm,ss

30 30Egypt . . . . . . . . . . . . . . EG

15 30

h,l

15 30

d,f

0 0Estonia . . . . . . . . . . . . . EN

g,oo

g,ff,oo

g,oo

g,x

g,l

g,bb

10 30

d,f

0 30Finland . . . . . . . . . . . . . FI

g,oo

g,ff,oo

g,oo

g,zz,ab

g,xx,zz,ab

g,l

0 30

d,f

0 30France . . . . . . . . . . . . . FR

g,ff

b,g,pp

g,x

g,l

0 30

0 30Germany . . . . . . . . . . . . GM

g,m

g,m,ff

g,m

g,zz,ab

g,xx,zz,ab

g,l

g,dd

0 30

d,f

0 0Greece . . . . . . . . . . . . . GR

0 30 30 30 30

0 30

0 30Hungary . . . . . . . . . . . . HU

g,l

0 30

d,f

0 30Iceland (old treaty) . . . . . IC

g,l

0 30

d,f

0 30Iceland (new treaty) . . . . . IC

g,oo,

g,ff,oo

g,oo

g,pp,ad

g,l

g,ll

0 30

0 30India. . . . . . . . . . . . . . . IN

g,aa

g,x

15 30

g,bb

15 30

d,f

0 30Indonesia . . . . . . . . . . . ID

g,l,z

g,bb

10 30

d,f,q

15 30Ireland . . . . . . . . . . . . . EI

g,ff

g,pp

g,l

0 30

d,f

0 0Israel . . . . . . . . . . . . . . IS

g,aa,ii

g,aa,ff,ii

g,xi

g,x

g,cc

10 30

0 0Italy . . . . . . . . . . . . . . . IT

e,g

g,l

g,s

5 30

d,f

0 0Jamaica . . . . . . . . . . . . JM

g,l

10 30

d,f,p

0 30Japan . . . . . . . . . . . . . . JA

g,ww,zz,ac

g,ff,ww,zz,ac

g,ww,zz,ac

g,w,zz,ab

e,g,ww,zz,ab

g,l

g,ww

0 30

0 0Kazahkstan . . . . . . . . . . KZ

g,ff

g,gg

g,l

g,jj

10 30

d,f

0 30Korea, Rep. of . . . . . . . . KS

g,l

10 30

d,f

0 30Latvia . . . . . . . . . . . . . . LG

g,oo

g,ff,oo

g,oo

g,x

g,l

g,bb

10 30

d,f

0 30Lithuania . . . . . . . . . . . . LH

g,oo

g,ff,oo

g,oo

g,x

g,l

g,bb

10 30

d,f

0 30Luxembourg. . . . . . . . . . LU

g,h

g,ff,h

g,h

g,z

g,x

0 30

0 30Mexico . . . . . . . . . . . . . MX

g,qq

g,ff,qq

g,pp,bb

g,pp,w,xx

g,l

10 30

0 30Morocco . . . . . . . . . . . . MO

g,l

10 30

d,f

0 30Netherlands . . . . . . . . . . NL

g,hh

g,dd

0 30

d,f,t

0 30New Zealand . . . . . . . . . NZ

g,l

10 30

0 30Norway . . . . . . . . . . . . . NO

g,l

0 30

d,f

0 30

P a g e 3 6

P u b l i c a t i on 9 0 1 ( A pr i l 2 0 0 9 )

Table 1.

Tax Rates on Income Other Than Personal Service Income Under Chapter 3, Internal Revenue Code, and Income Tax Treaties

Rate

a,b

Gains

Royalties Television Other Royalties

Annuities Payment

Pakistan . . . . . . . . . . . . PK 30 30 30 30

15 30

0 30

d,l

0 30Philippines . . . . . . . . . . . RP

g,l

15 30

30 30Poland . . . . . . . . . . . . . PL

g,l

10 30 30 30Portugal . . . . . . . . . . . . PO

g,ff

g,x

g,l

10 30

d,f

0 30Romania . . . . . . . . . . . . RO

g,l

10 30

d,f

0 0Rusia . . . . . . . . . . . . . . RS

g,ff

g,gg

g,l

0 30

0 30Slovak Republic . . . . . . . LO

g,ff

g,x

g,l

0 30

d,f

0 30Slovenia . . . . . . . . . . . . SI

g,ff

g,pp

5 30

d,f

0 30South Africa . . . . . . . . . . SF

g,m

g,m,ff

g,m

g,x

0 30

d,kk

15 30Spain . . . . . . . . . . . . . . SP

g,x

g,l

g,y

5 30

d,f

0 30Sri Lanka . . . . . . . . . . . CE

g,m

g,m,ff

g,m

g,rr

g,hh

g,s

10 30

d,mm

0 30Sweden . . . . . . . . . . . . SW

g,ff

g,zz,ab

g,xx,zz,ab

g,l

0 30

0 30Switzerland . . . . . . . . . . SZ

g,m

g,m,ff

g,m

g,x

0 30

0 15Thailand . . . . . . . . . . . . TH

g,aa

g,aa,ff

g,aa

g,x

10 30

8 5

15 30

d,f

0 30Trinidad & Tobago . . . . . . TD 30 30 30 30 30 30

15 30

0 30

d,f

0 30Tunisia . . . . . . . . . . . . . TS

g,x

g,l

g,bb

15 30

0 30Turkey . . . . . . . . . . . . . TU

g,i,aa

g,i,ff,aa

g,i,aa

g,x

g,l

5 10 10 30

0 30Ukraine . . . . . . . . . . . . . UP

g,ff

g,gg

10 30

0 30United Kingdom . . . . . . . UK

g,oo,ww

g,ff,oo,ww

g,oo,ww

g,pp,ww

g,pp,ww,xx

g,ww

0 30

d,f

0 0Venezuela . . . . . . . . . . . VE

g,nn,oo

g,ff,nn,oo

g,pp

g,l

g,bb

10 30

d,mm

0 30Other Countries . . . . . . . 30 30 30 30 30 30 30 30 30 30 30 30

No U.S. tax is imposed on a dividend paid by a U.S.

The exemption applies only to interest on credits,

Exemption or reduced rate does not apply to ancorporation that received at least 80% of its grossloans, and other indebtedness connected with theexcess inclusion for a residual interest in a realincome from an active foreign business for thefinancing of trade between the United States and theestate mortgage investment conduit (REMIC).3-year period before the dividend is declared.C.I.S. member. It does not include interest from the

The rate in column 6 applies to dividends paid by aconduct of a general banking business.

The reduced rate applies to dividends paid by aregulated investment company (RIC). Dividendssubsidiary to a foreign parent corporation that has

The exemption applies only to gains from the sale orpaid by a real estate investment trust (REIT) arethe required percentage of stock ownership. In someother disposition of property acquired by gift orsubject to a 30% rate.cases, the income of the subsidiary must meetinheritance.

The exemption does not apply to a sale of a U.S.certain requirements (e.g., a certain percentage of

The exemption does not apply if the recipient was acompany’s stock representing ownership of 50% orits total income must consist of income other thanresident of the United States when the pension wasmore.dividends and interest).earned or when the annuity was purchased.

An election can be made to treat this interest income

The exemption or reduction in rate applies only if the

Annuities paid in return for other than the recipient’sas if it were industrial and commercial profits taxablerecipient is subject to tax on this income in theservices are exempt. For Bangladesh, exemptionunder article 8 of the treaty.country of residence. Otherwise, a 30% rate applies.does not apply to annuity received for services

If the payments were for the use of, or the right to

Exemption does not apply to U.S. Governmentrendered.use, industrial, commercial, or scientific equipment,(federal, state, or local) pensions and annuities; a

Generally, if the property was owned by thean election may be made to compute the tax on a net30% rate applies to these pensions and annuities.Canadian resident on September 26, 1980, not asbasis as if such income were attributable to aFor this purpose, railroad retirement tier 2, dual, andpart of the business property of a permanentpermanent establishment or fixed base in the U.S.supplemental benefits are not considered U.S.establishment or fixed base in the U.S., the taxable

The reduced rate does not apply if the distribution isGovernment pensions or annuities. U.S.gain is limited to the appreciation after 1984. Capitalsubject to a penalty for early withdrawal. AnnuitiesGovernment pensions paid to an individual who isgains on personal property not belonging to athat were purchased while the annuitant was not aboth a resident and national of Bangladesh,permanent establishment or fixed base of theresident of the United States are not taxable in theBelgium, Bulgaria, China, Denmark, Estonia,taxpayer in the U.S. are exempt.United States.Finland, Germany, Hungary, Iceland, India, Ireland,

The rate for royalties with respect to tangible

For Thailand, the rate is 5% for royalties on the useItaly, Latvia, Lithuania, Luxembourg, Mexico, thepersonal property is 7% (5% in the case of Sriof any copyright of literary, artistic, or scientific work,Netherlands, Portugal, Russia, Slovenia, SouthLanka).including software. For Iceland, the rate is 5% forAfrica, Spain, Switzerland, Thailand, Turkey, the

The exemption does not apply if (1) the recipient wastrademarks and any information for rentals ofUnited Kingdom, or Venezuela are exempt from U.S.a U.S. resident during the 5-year period before theindustrial, commercial, or scientific equipment.tax. U.S. Government pensions paid to an individualdate of payment, (2) the amount was paid forwho is both a resident and citizen of Kazakstan, New

Does not apply to annuities. For Denmark, annuitiesemployment performed in the United States, and (3)Zealand, or Sweden are exempt from U.S. tax.are exempt.the amount is not a periodic payment, or is a

For Italy, the reduced rate is 10% if the foreign

The rate is 4.95% if the interest is beneficially ownedlump-sum payment in lieu of a right to receive ancorporation owns 10% to 50% of the voting stock (forby a financial institution (including an insuranceannuity.a 12-month period) of the company paying thecompany).

Applies to 85% of the social security paymentsdividends. For Japan, dividends received from a

The rate is 15% for interest determined withreceived from the U.S. Government. The effectivemore than 50% owned corporate subsidiary arereference to (a) receipts, sales, income, profits orrate on the total social security payments received isexempt if certain conditions are met.other cash flow of the debtor or a related person, (b)85% of the rate shown in the table. These rates also

Includes alimony.any change in the value of any property of the debtorapply to the social security equivalent portion of tier 1or a related person, or (c) any dividend, partnership

The exemption or reduction in rate does not apply ifrailroad retirement benefits (income code 22)distribution, or similar payment made by the debtorthe recipient has a permanent establishment in thereceived from the U.S. The remainder of tier 1, all ofor related person.United States and the property giving rise to thetier 2, dual, and supplemental railroad retirementincome is effectively connected with this permanent

The rate in column 6 applies to dividends paid by abenefits (income code 23) are taxed as shown inestablishment. Under certain treaties, exemption orregulated investment company (RIC) or real estatecolumn 14, “Pensions and Annuities.”reduction in rate also does not apply if the propertyinvestment trust (REIT). However, that rate applies

Gains on the disposition of U.S. real propertyproducing the income is effectively connected with ato dividends paid by a REIT only if the beneficialinterests are considered effectively connected with afixed base in the United States from which theowner of the dividends is (a) an individual holding notU.S. trade or business and thus are subject torecipient performs independent personal services.more than a 10% interest in the REIT, (b) a persongraduated rates of tax rather than the flat percentageEven with the treaty, if the income is not effectivelyholding not more than 5% of any class of the REIT’sshown in this column.connected with a trade or business in the Unitedstock and the dividends are paid on stock that is

Tax imposed on 70% of gross royalties for rentals ofStates by the recipient, the recipient will bepublicly traded, or (c) a person holding not more thanindustrial, commercial, or scientific equipment.considered as not having a permanenta 10% interest in the REIT and the REIT isestablishment in the United States under Internal

The rate in column 6 applies to dividends paid by adiversified.Revenue Code section 894(b).regulated investment company (RIC) or a real estate

The rate is 4.9% for interest derived from (1) loansinvestment trust (REIT). However, that rate applies

The exemption or reduction in rate does not apply ifgranted by banks and insurance companies and (2)to dividends paid by a REIT only if the beneficialthe recipient is engaged in a trade or business in thebonds or securities that are regularly andowner of the dividends is an individual holding lessUnited States through a permanent establishmentsubstantially traded on a recognized securitiesthan a 10% interest (25% in the case of Portugal,that is in the United States. However, if the income ismarket. The rate is 10% for interest not described inSpain, and Tunisia) in the REIT.not effectively connected with a trade or business inthe preceding sentence and paid (i) by banks or (ii)the United States by the recipient, the recipient will

Royalties not taxed at the 5% or 8% rate are taxed atby the buyer of machinery and equipment to thebe considered as not having a permanenta 10% rate, unless footnote (g) applies.seller due to a sale on credit.establishment in the United States to apply the

The exemption does not apply if the recipient of the

The rate applies to dividends paid by a real estatereduced treaty rate to that item of income.gain is an individual who is present in the Unitedinvestment trust (REIT) only if the beneficial owner of

Contingent interest that does not qualify as portfolioStates for more than 119 days during the year.the dividends is (a) an individual holding less than ainterest is treated as a dividend and is subject to the10% interest in the REIT, (b) a person holding not

The rate is 10% if the interest is paid on a loanrate under column 6 or 7.more than 5% of any class of the REIT’s stock andgranted by a bank or similar financial institution. Forthe dividends are paid on stock that is publicly

Exemption is not available when paid from a fundThailand, the 10% rate also applies to interest fromtraded, or (c) a person holding not more than a 10%under an employees’ pension or annuity plan, ifan arm’s length sale on credit of equipment,interest in the REIT and the REIT is diversified.contributions to it are deductible under U.S. tax lawsmerchandise, or services.in determining taxable income of the employer.

Generally, if the person was receiving pension

This is the rate for royalties for the use of, or the rightdistributions before March 31, 2000, the distributions

Applies to 100% of the social security and otherto use, industrial, commercial, and scientificcontinue to be exempt from U.S. tax.public pensions received from the U.S. government.equipment. The rate for royalties for informationconcerning industrial, commercial and scientific

Interest determined with reference to the profits of

Exemption does not apply to gains from the sale ofknow-how is subject to the rate in column 12.the issuer or one of its associated enterprises isreal property. However, for U.S. real property thattaxed at 15%.was owned continuously since June 18, 1980, by a

The exemption does not apply to gain from the saleNetherlands resident, the taxable gain may beor other disposition of property described in Article

Interest received by a financial institution is exempt.limited to the appreciation after 1984. For details,14(2)(c) (copyrights of literary, artistic, or scientific

Dividends received by a trust, company, or othersee Article 14(2) of the treaty.works).organization operated exclusively to administer or

The rate is 15% (10% for Bulgaria; 30% for Germany

The exemption does not apply to cinematographicprovide pension, retirement, or other employeeand Switzerland) for contingent interest that does notitems, or works on film, tape, or other means ofbenefits generally are exempt if certain conditionsqualify as portfolio interest. For Canada, the rate isreproduction for use in radio or televisionare met.4% for 2009 if the payer and the beneficial owner arebroadcasting.

Exemption does not apply to amount paid under, orrelated.

U.S. social security benefits paid to individuals whoas part of, a conduit arrangement.are both residents and nationals of India are exempt

Dividends received from an 80%-owned corporatefrom tax if they are for services performed for thesubsidiary are exempt if certain conditions are met.United States, its subdivisions, or local authorities.

Publication 901 (April 2009)

Page 37