GUIDELINES MODIFIED FOR ALIEN NONRESIDENT WITHHOLDING EXEMPTION.

Rev. Proc. 93-22 ¹

SECTION 1. PURPOSE AND SCOPE

This revenue procedure modifies Rev. Proc. 87-8, 1987-1 C.B. 336, and Rev. Proc. 87-9, 1987-1 C.B. 368, by providing the representations that an alien must make to claim a withholding exemption under certain newly ratified income tax treaties.

Under most U.S. income tax treaties, an alien student, teacher, or researcher at a United States university or other educational institution who receives income for personal services is generally exempt from income tax provided certain requirements are met. These requirements include a limited number of years in which the alien can claim the exemption and a maximum dollar amount for the exemption in a taxable year.

Normally, the payor of compensation for personal services is required under section 1441 or 3405 of the Code to withhold and pay over federal taxes on such income. However, withholding is not required if the income is exempt under treaty. In order to claim the withholding exemption, the alien must submit Form 8233 to the withholding agent certifying that the income is exempt from taxation under treaty.

An alien student, teacher, or researcher must include within Form 8233 representations providing the conditions under which the income is exempt under treaty. These representations are provided in Rev. Proc. 87-8 (applicable to students) and Rev. Proc. 87-9 (applicable to teachers and researchers). Upon receiving these representations, the withholding agent will not be liable for failure to withhold and pay over federal income tax, unless the agent actually knows or reasonably should know that the alien is not eligible for the treaty exemption.

This revenue procedure modifies Rev. Proc. 87-8 and Rev. Proc. 87-9 by providing the representations that an alien must include in Form 8233 to claim a withholding exemption under the newly ratified treaties with Germany (Article 20), India (Article 22), Indonesia (Articles 19 & 20), Spain (Article 22), and Tunisia (Article 20). This revenue procedure also modifies the representations in Rev. Proc. 87-9 pertaining to the treaty with the former Union of Soviet Socialist Republics (Article VI).

This revenue procedure obsoletes representations in Rev. Proc. 87-8 and Rev. Proc. 87-9 pertaining to the earlier treaty with Finland, which has been replaced by a newly ratified treaty. The new treaty does not exempt income earned within the United States by alien students, teachers, or researchers.

This revenue procedure also modifies Rev. Proc. 87-8, with respect to the maximum annual exemption allowed students under the Cyprus treaty.

SEC. 2. REPRESENTATIONS UNDER REVENUE PROCEDURE 87-8 (STUDENTS)

.01 Germany (Article 20)

1. I was a resident of the Federal Republic of Germany on the date of my arrival in the United States. I am not a United States citizen. I have not been lawfully accorded the privilege of residing permanently in the United States as an immigrant.

2. I am temporarily present in the United States as a student or business apprentice for the purpose of full-time study or training at _________ (insert the name of the accredited university, college, school or other educational institution); or, I am temporarily present in the United States as a recipient of a grant, allowance, or award from _____________ (insert the name of the nonprofit organization or government institution providing the grant, allowance, or award).

3. I will receive compensation for dependent personal services performed in the United States. This compensation qualifies for exemption from withholding of federal income tax under the tax treaty between the United States and the Federal Republic of Germany in an amount not in excess of $5000 for any taxable year, provided that such services are performed for the purpose of supplementing funds otherwise available for my maintenance, education, or training.

4. I arrived in the United States on _______________ (insert the date of the alien's last arrival in the United States before beginning study at the United States educational institution). The treaty exemption is available only for compensation paid during a period of four taxable years beginning with the taxable year that includes my arrival date.

.02 Spain (Article 22)

1. I was a resident of Spain on the date of my arrival in the United States. I am not a United States citizen. I have not been lawfully accorded the privilege of residing permanently in the United States as an immigrant.

2. I am temporarily present in the United States for the primary purpose of studying or training at ___________ (insert the name of the university or other accredited educational institution at which the alien studies or trains); or, I am temporarily present in the United States as a recipient of a grant, allowance, or award from __________ (insert the name of the nonprofit organization or government institution providing the grant, allowance, or award).

3. I will receive compensation for services performed in the United States. This compensation qualifies for exemption from withholding of federal income tax under the tax treaty between the United States and Spain in an amount not in excess of $5000 for any taxable year.

4. I arrived in the United States on ______________ (insert the date of the alien's last arrival in the United States before beginning study at the United States educational institution). The treaty exemption is available only for compensation paid during a period of five taxable years beginning with the taxable year that includes my arrival date.

.03 Indonesia (Article 19)

1. I was a resident of Indonesia on the date of my arrival in the United States. I am not a United States citizen. I have not been lawfully accorded the privilege of residing permanently in the United States as an immigrant.

2. I am temporarily present in the United States solely for the purpose of study at _________ (insert the name of the university or other accredited educational institution at which the alien studies); or, I am temporarily present in the United States as a recipient of a grant, allowance, or award from_____________ (insert the name of the nonprofit organization or government institution providing the grant, allowance, or award) for the primary purpose of study, research, or training.

3. I will receive compensation for services performed in the United States. This compensation qualifies for exemption from withholding of federal income tax under the tax treaty between the United States and Indonesia in an amount not in excess of $2000 for any taxable year, provided such services are performed in connection with my studies or are necessary for my maintenance.

4. I arrived in the United States on _______________ (insert the date of the alien's last arrival in the United States before beginning study at the United States educational institution). The treaty exemption is available only for compensation paid during a period of five taxable years beginning with the taxable year that includes my arrival date.

.04 Tunisia (Article 20)

1. I was a resident of Tunisia on the date of my arrival in the United States. I am not a United States citizen. I have not been lawfully accorded the privilege of residing permanently in the United States as an immigrant.

2. I am temporarily present in the United States for the purpose of full-time study, training, or research at ______________ (insert the name of the university or other accredited educational institution at which the alien studies, trains, or performs research).

3. I will receive compensation for services performed in the United States. This compensation qualifies for exemption from withholding of federal income tax under the tax treaty between the United States and Tunisia in an amount not in excess of $4000 for any taxable year.

4. I arrived in the United States on _____________ (insert the date of the alien's last arrival in the United States before beginning study at the United States educational institution). The treaty exemption is available only for compensation paid during a period of five taxable years beginning with the taxable year that includes my arrival date.

SEC. 3. REPRESENTATIONS UNDER REVENUE PROCEDURE 87-9 (TEACHERS AND RESEARCHERS)

.01 Germany (Article 20)

1. I am a resident of the Federal Republic of Germany. I am not a United States citizen. I have not been lawfully accorded the privilege of residing permanently in the United States as an immigrant.

2. I am a professor or teacher visiting the United States for the purpose of advanced study, teaching, or research, at ____________ (insert the name of the accredited university, college, school, or other educational institution, or a public research institution or other institution engaged in research for the public benefit). I will receive compensation for my teaching, research, or study activities.

3. The compensation received during the entire taxable year (or during the period from_______ to ________ ) for these activities qualifies for exemption from withholding of federal tax under the tax treaty between the United States and the Federal Republic of Germany. I have not previously claimed an income tax exemption under that treaty for income received as a student, apprentice, or trainee during the immediately preceding period. (If, however, following the period in which the alien claimed benefits as a student, apprentice, or trainee, that person returned to the Federal Republic of Germany and resumed residence and physical presence before returning to the United States as a teacher or researcher, that person may claim the benefits of this treaty.)

4. Any research I perform will be undertaken in the public interest and not primarily for the private benefit of a specific person or persons.

5. I arrived in the United States on _____________ (insert the date of the alien's last arrival into the United States before beginning the services for which the exemption is claimed). The treaty exemption is available only for compensation paid during a period of two years beginning on that date.

.02 Indonesia (Article 20)

1. I was a resident of Indonesia on the date of my arrival in the United States. I am not a United States citizen. I have not been lawfully accorded the privilege of residing permanently in the United States as an immigrant.

2. I have accepted an invitation by ______ (insert the name of the university, college, school, or other similar educational institution) to come to the United States solely for the purpose of teaching or engaging in research at that educational institution. I will receive compensation for my teaching or research activities.

3. The teaching or research compensation received during the entire taxable year (or during the period from _______ to _______) qualifies for exemption from withholding of federal tax under the tax treaty between the United States and Indonesia. I have not previously claimed an income tax exemption under that treaty for income received as a teacher or researcher before the date specified in paragraph (5).

4. Any research I perform will be undertaken in the public interest and not primarily for the private benefit of a specific person or persons.

5. I arrived in the United States on ________________ (insert the date of the alien's last arrival into the United States before beginning the teaching or research services for which the exemption is claimed). The treaty exemption is available only for compensation paid during a period of two years beginning on that date.

.03 India (Article 22)

1. I was a resident of India on the date of my arrival in the United States. I am not a United States citizen. I have not been lawfully accorded the privilege of residing permanently in the United States as an immigrant.

2. I am visiting the United States for the purpose of teaching or conducting research at __________ (insert the name of the university, college, or other recognized educational institution). I will receive compensation for my teaching or study activities.

3. The teaching or research compensation received during the entire taxable year (or during the period from _______ to _______) for these activities qualifies for exemption from withholding of federal tax under the tax treaty between the United States and India.

4. Any research I perform will be undertaken in the public interest and not primarily for the private benefit of a specific person or persons.

5. I arrived in the United States on ______________ (insert the date of the alien's last arrival into the United States before beginning the services for which the exemption is claimed). The treaty exemption is available only for compensation paid during a period of two years beginning on that date.

SEC. 4. TREATY WITH THE FORMER UNION OF SOVIET SOCIALIST REPUBLICS

The treaty with the former Union of Soviet Socialist Republics remains in effect for the following countries: Armenia, Azerbaijan, Byelarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. United States withholding agents should apply the terms of the treaty to payments of income made to residents of these countries. Section 5.13 of Rev. Proc. 87-9 provides representations that an alien teacher or researcher must include in Form 8233 in order to claim a withholding exemption under this treaty. The representations in section 5.13 are superseded by the following statements, which will remain in effect for these countries until superseded by treaties between the United States and these countries.

1. I am a resident of ________ (Armenia, Azerbaijan, Byelarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, or Uzbekistan). I am not a United States citizen. I have not been lawfully accorded the privilege of residing permanently in the United States as an immigrant.

2. I have accepted an invitation by a governmental agency or institution in the United States, or by an educational or scientific research institution in the United States, to come to the United States for the purpose of teaching, engaging in research, or participating in scientific, technical, or professional conferences at ____________ (insert the name of the governmental agency or institution, educational or scientific institution, or organization sponsoring a professional conference), which is a governmental agency or institution, an educational or scientific institution, or an organization sponsoring a professional conference. I will receive compensation for my teaching, research, or conference activities.

3. The teaching, research, or conference compensation received during the entire taxable year (or during the period from _______ to _______) qualifies for exemption from withholding of federal tax under the tax treaty between the United States and the former Union of Soviet Socialist Republics. I have not previously claimed an income tax exemption under that treaty for income received as a teacher, researcher, conference participant, or student before the date of my arrival in the United States.

4. Any research I perform will not be undertaken primarily for the benefit of a private person or commercial enterprise of the United States or a foreign trade organization of ______________ (Armenia, Azerbaijan, Byelarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, or Uzbekistan), unless the research is conducted on the basis of intergovernmental agreements on cooperation.

5. I arrived in the United States on _______________ [insert the date of the alien's last arrival in the United States before beginning the teaching, research, or conference services for which exemption is claimed]. The treaty exemption is available only for compensation received during a period of two years beginning on that date.

SEC. 5. NEW TREATY WITH FINLAND

Section 5.03 of Rev. Proc. 87-8 and section 5.04 of Rev. Proc. 87-9 provide representations for alien students, teachers, and researchers under the earlier treaty with Finland, which has been replaced by a newly ratified treaty, entered into force on December 3, 1990. The new treaty does not provide for an exemption for income earned by alien teachers and researchers, and the exemption for income earned by alien students and trainees (under Article 20) applies only to payments that arise outside of the United States. Therefore, section 5.03 of Rev. Proc. 87-8 and section 5.04 of Rev. Proc. 87-9 are obsolete to the extent they pertain to alien students, teachers, and researchers of Finland.

SEC. 6. MODIFICATION OF REV. PROC. 87-8

In Rev. Proc. 87-8, paragraph 3 of section 5.05 contains a representation that a Cypriot student is allowed a maximum exemption of $5,000 for the taxable year. The treaty in fact provides an exemption of only $2,000 for the taxable year. Section 5.05, paragraph 3, is superseded by the following statements.

3. I will receive compensation for personal services performed in the United States. This compensation qualifies for exemption from withholding of federal income tax under the tax treaty between the United States and Cyprus in an amount not in excess of $2,000 for any taxable year. I have not previously claimed an income tax exemption under that treaty for income received as a student before the date of my arrival in the United States.

SEC. 7. EFFECT ON OTHER DOCUMENTS

Rev. Proc. 87-8, 1987-1 C.B. 366, and Rev. Proc. 87-9, 1987-1 C.B. 368, are modified.

SEC. 8. EFFECTIVE DATE

This revenue procedure is effective May 3, 1993, except for the part of the revenue procedure that pertains to Cypriot students, which is effective June 2, 1993.

DRAFTING INFORMATION

The principal author of this revenue procedure is Robert W. Lorence Jr. of the Office of Associate Chief Counsel (International). For further information regarding this revenue procedure, call Mr. Lorence at (202) 622-3880 (not a toll-free call).

¹ As corrected by Rev. Proc. 93-22A, 1993-2 C.B. 343.