* See Institute Memorandum to Tax Members No. 19-96, Operations Members No. 18-96 and Transfer Agent
Advisory Committee No. 22-96, dated April 25, 1996.
VIA FAX
April 30, 1996
TO: TAX COMMITTEE No. 13-96
OPERATIONS COMMITTEE No. 8-96
TRANSFER AGENT ADVISORY COMMITTEE No. 23-96
RE: MAY 15 MEETING ON NONRESIDENT ALIEN WITHHOLDING REGULATIONS
______________________________________________________________________________
Last week, the Internal Revenue Service released proposed regulations that would
extensively revise the regulations imposing withholding tax on nonresident aliens ("NRAs")
and foreign corporations. As discussed in detail in the Institute Memorandum on these
regulations,* the proposed regulations would eliminate the so-called "address rule" used by
regulated investment companies ("RICs") and others to reduce withholding tax, pursuant to
income tax treaties, on dividends paid to NRA shareholders. Instead, treaty benefits could be
provided for dividends on stocks that trade on a "U.S. established financial market" if, among
other things, the NRA (1) provided an IRS Form W-8, which would not need to contain a
taxpayer identification number, or (2) invested through a foreign institution that met the
requirements for "qualified intermediary" treatment.
The Institute will be preparing comments on the proposed regulations, which must be
submitted to IRS by July 22, 1996. Among other things, the Institute will urge that the proposed
regulations definition of "U.S. established financial market" be modified because, as discussed
in the Institute’s April 25 Memorandum, mutual funds do not trade pursuant to either of the
sections of the Securities Exchange Act of 1934 that are part of the definition.
On May 15, the Institute will hold a meeting of interested members to review the
proposed regulations and develop other issues for inclusion in the comment letter. The
meeting, which will be held in the David Silver Conference Room on the 12th Floor of the
Institutes offices at 1201 H Street, N.W. Washington, D.C. 20005, will begin at 10:00 a.m. and
end with lunch. If you plan to attend the meeting on May 15, please complete the attached fax
response form and return it to Theresa Brice at (202) 326-5839. Questions regarding the meeting
or the proposed regulations can be directed to the undersigned at (202) 326-5832.
Keith D. Lawson
Associate Counsel - Tax
Attachment
ATTENDANCE RESPONSE FORM
INVESTMENT COMPANY INSTITUTE
NONRESIDENT ALIEN WITHHOLDING REGULATIONS MEETING
Wednesday, May 15, 1996
Please fax this portion by Monday, May 13, 1996 to Theresa Brice
Investment Company Institute, 202-326-5839.
YES NO
____ ____ NONRESIDENT ALIEN WITHHOLDING REGULATIONS
MEETING - 10:00 a.m.
____ ____ LUNCH
______________________________________ or ______________________________________
COMMITTEE MEMBER’S NAME ALTERNATE’S NAME
_________________________________________________
COMPANY NAME
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