Guide to Global Payroll Management - 2020 - E-20

E-20

Unless the treaty, technical explanation to the treaty, or any relevant competent authority arrangement provides otherwise, the copyright tax rate
provided in column 12 applies to royalties for computer software. In Italy, for example, royalties for computer software are subject to the same
rate as payments for the right to use industrial equipment.

In Kazakhstan, the beneficial owner may elect to compute tax on a net basis as if attributable to a U.S. permanent establishment.

Note that Philippine's tax rate differs from the U.S. tax rate.

In Tunisia, payments for the use of ships, aircraft, or containers used in international traffic are not included.

In general, royalties include gains derived from the alienation of property covered by the Royalty article to the extent such gains are contingent
on the productivity, use, or disposition of such property.

[reserved]

The branch profits tax applies only to the dividend equivalent amount of a foreign corporation that has business profits attributable to a
permanent establishment in the United States or is otherwise taxed on a net basis under a treaty (e.g., income from real property in the United
States). The rate is generally the same rate as the direct dividend rate (including an exemption if direct dividends qualify for an exemption),
provided the treaty has entered into effect after January 1, 1987. If a new treaty has not entered into force, then the rate is 0 (Cyprus, China,
Egypt, Greece, Hungary, Jamaica, Korea, Morocco, Norway, Pakistan, Poland, Romania, and the Philippines), except for Trinidad &Tobago-
10%, and countries to which the U.S.S.R. treaty applies-30% (no direct dividend rate).

If an individual is a resident but not a domiciliary of the country, and income or gain subject to tax by reference to the amount remitted to or
received in that country and not by reference to the full amount thereof, then the exemption or reduced rates for items provided for in this table is
only available for the amount remitted to that country.

Branch interest (section 884(f)(1)(A)) paid by the U.S. trade or business of a foreign corporation is treated as if it were paid by a domestic
corporation to the actual lender and is subject to chapter 3 withholding (income code 4). For treaty purposes, interest borne by a permanent
establishment and paid to a resident of a treaty jurisdiction is taxable at the rate applicable to that payment as if had it been paid by a U.S.
resident to such person. Alternatively, if a treaty specifically prevents imposition of tax on U.S. source interest paid by a foreign corporation to
such resident, then the rate is 0. The tax rate on excess interest is the same as the general interest rate, but excess interest is a deemed
payment by a domestic corporation to its foreign parent at the end of the year and is not a withholdable amount.

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15% rate applies if income is attributable to a permanent establishment which that enterprise has in a third state, if the tax that is actually paid
with respect to such income in the third state is less than 60 percent of the tax that would have been payable in the treaty country if the income
were earned in by the enterprise and were not attributable to the permanent establishment in the third state, unless derived in the active conduct
of a trade or business in that third state.

Table 1. Tax Rates on Income Other Than Personal Service Income Under Chapter 3, Internal Revenue Code, and Income Tax Treaties

In Barbados, no benefits for interest, dividends or royalties are permitted if recipient is subject to a special tax regime or administrative practice
that provides for an effective tax rate substantially lower than the generally applicable tax rate for companies or individuals as appropriate.

Footnotes to Table 1. Tax Rates on Income Other Than Personal Service Income Under Chapter 3, Internal Revenue Code, and
Income Tax Treaties

Guide to Global Payroll Management

Table 1. (Continued)

Guide to Global Payroll Management - 2020

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