Rev. Rul. 66-362

Interest payments made by a wholly owned United States corporation to its Netherlands Antilles parent corporation are not exempt from United States income tax pursuant to Article VIII(1) of the Income Tax Convention between the United States and the Kingdom of the Netherlands, as extended to the Netherlands Antilles, T.D. 5778, C.B. 1950-1, 92; supplemented by the Protocol of June 15, 1955 (C.B. 1956-2, 1116), and modified and supplemented by the Protocol of October 23, 1963 (C.B. 1965-1, 624). Withholding of Federal income tax at source on such interest is required under section 1442 of the Internal Revenue Code of 1954, T.D. 6153 , C.B. 1955-2, 777; supplemented by Rev. Proc. 65-2, C.B. 1965-1, 715, and Rev. Proc. 66-40, page 1245, this Bulletin. The provisions of Article I(2)(a) of the Protocol of October 23, 1963, do not affect the tax consequences of Article VIII(1) of the Convention with respect to interest payments made by a United States corporation to a Netherlands Antilles corporation which owns more than 50 percent of the entire voting power of the paying corporation.

Article VIII of the basic convention as extended to the Netherlands Antilles was not changed by the Supplementary Convention of December 30, 1965, since Article XV thereof limits application of the Supplementary Convention to the part of the Kingdom of the Netherlands that is situated in Europe.