Announcement 2003-62

Announcement 2003-62

Supplemental Tables of Income Tax Rates Under New Income Tax Conventions

The United States recently exchanged instruments of ratification for a new income tax treaty with the United Kingdom and new protocols for the income tax treaties with Australia and Mexico. The effective dates are as follows:

United Kingdom. The provisions for withholding tax at source are effective for amounts paid or credited after May 1, 2003. For all other taxes, the treaty is effective for tax periods beginning on or after January 1, 2004. Students who have claimed treaty benefits under Article 21 of the former treaty can continue to apply those provisions.

A person entitled to benefits under the previous treaty with the United Kingdom can elect to have that treaty apply in its entirety for a twelve-month period following the date the new treaty would otherwise apply.

Australia. The provisions for withholding tax at source are effective for amounts paid or credited after July 1, 2003. For all other taxes, the protocol is effective for tax periods beginning on or after January 1, 2004.

Mexico. The provisions for withholding tax on dividends are effective for amounts paid or credited on or after September 1, 2003. For all other taxes, the treaty is effective for tax periods beginning on or after January 1, 2004.

The tables below replace the entries in Tables 1 and 2 in Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities (For Withholding in 2003), and in Publication 901, U.S. Tax Treaties. The footnotes in those publications that relate to the column headings in these tables generally apply to these replacement entries.

The complete text of the U.K. treaty and the Australia and Mexico protocols are available on the IRS website at www.irs.gov.

Summary: Table 1. Withholding tax rates on income other than for personal services.

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Summary: Table 2. Compensation for Personal Services Performed in United States Exempt from Withholding and U.S. Income Tax Under Income Tax Treaties

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