Rev. Rul. 66-55

Article VIII of the United States-Finland Income Tax Convention, T.D. 6202, C.B. 1956-2, 1067, provides that royalties for the right to use copyrights or in respect of the right to produce any literary, dramatic, musical, or artistic work (but not inclusive of rents or royalties in respect of motion picture films) derived from sources within the United States by a resident, corporation, or other entity of Finland, not engaged in trade or business in the United States through a permanent establishment in the United States, are exempt from United States tax.

The term royalties, within the purview of Article VIII of the convention, does not include industrial royalties.

Revenue Ruling 60-288, C.B. 1960-2, 265, is hereby clarified to show, in the case of Finland, that industrial royalties are not exempt from United States tax, and that tax is to be withheld at the statutory rate prescribed by sections 1441 and 1442 of the Internal Revenue Code of 1954. This Revenue Ruling is not determinative with respect to industrial royalties under income tax conventions with other countries enumerated in Revenue Ruling 60-288.