1 See Institute Memorandum to Operations Members No. 35-98, Tax Members No. 42-98, Transfer Agent Advisory
Committee No. 82-98, dated December 3, 1998.
[10602]
December 23, 1998
TO: TAX COMMITTEE No. 40-98
OPERATIONS COMMITTEE No. 46-98
TRANSFER AGENT ADVISORY COMMITTEE No. 87-98
BANK AND TRUST ADVISORY COMMITTEE No. 16-98
RE: FEBRUARY 9, 1999 MEETING ON NONRESIDENT ALIEN WITHHOLDING
REGULATIONS
______________________________________________________________________________
The Internal Revenue Service (“IRS”) has issued final withholding tax regulations that will apply
to certain US source income paid after December 31, 1999 to persons who are neither citizens nor
residents of the United States (“nonresident aliens” or NRAs”). The IRS also has released new Form
W-8 withholding certificates, which will replace current IRS Forms W-8, 1001, 4224 and 8709.1
The final regulations make a number of changes to the withholding tax rules that will affect
regulated investment companies and their NRA investors. For example, the final regulations eliminate
the “address rule” for dividends, pursuant to which a NRA investor could obtain reduced rates of
withholding provided by any income tax treaty between the United States and his or her country of
residence based solely on the investor’s address in the treaty country. Under the final regulations, a
NRA investor must provide a Form W-8 withholding certificate to obtain treaty benefits.
The Institute will hold a meeting on Tuesday, February 9, 1999 to discuss the impact of the
final regulations on regulated investment companies and the transition rules announced in IRS Notice
98-16 for the new Form W-8 withholding certificates. A detailed memorandum discussing the final
regulations will be circulated in advance of the meeting. The meeting will begin promptly at 1:00 p.m. in
the David Silver Conference Room, which is located on the 12th Floor of the Institute’s offices at 1401
H Street, NW, Washington, DC 20005. Lunch will be served immediately prior to the meeting.
ACTIONS REQUESTED:
1. If you plan to attend the meeting, please complete the attached meeting response form and
fax it to my assistant, Gloria Davis, at 202.326.5841. Alternatively, you may contact her at 202.371.5407
or gdavis@ici.org.
2. If you have suggestions for particular issues to be discussed at the meeting, please direct them
to the undersigned at dflores@ici.org or 202.371.5436.
Deanna J. Flores
Assistant Counsel
Attachment