News & Analysis as of

Withholding Tax Dividends Internal Revenue Service

Cadwalader, Wickersham & Taft LLP

IRS Kicks Substantial Equivalence Test Down the Road Again

On May 22, 2024, the IRS issued Notice 2024-44, which once again extends the phase-in for Section 871(m) withholding.  Broadly speaking, foreign persons may be subject to a 30% withholding tax under Section 871(m) on certain...more

Mayer Brown

Section 871(m) and BEAT Qualified Derivative Payment Reporting Phase-Ins Extended Two More Years

Mayer Brown on

On May 22, 2024, the US Department of Treasury and the IRS issued two important notices—one delaying the full implementation of the withholding rules on dividend equivalent payments, and the other on derivative reporting for...more

Bilzin Sumberg

US-Chile Income Tax Treaty Enters Into Force

Bilzin Sumberg on

On December 19, 2023, the U.S. Treasury Department announced that the Income Tax Treaty between the United States and Chile (the “Treaty”) entered into force. The Treaty was originally signed in February of 2010, and, after...more

Kramer Levin Naftalis & Frankel LLP

New Treasury Regulations and IRS Notice Regarding Withholding on Dividend Equivalent Payments to Foreign Holders

On Dec. 16, the Internal Revenue Service (IRS) issued final regulations (the new regulations) governing a narrow aspect of rules applicable to withholding on “dividend equivalent payments” made to foreign persons. The new...more

Akin Gump Strauss Hauer & Feld LLP

U.S. Withholding on Synthetic Trades over U.S. Equities (Section 871(m)) – Additional Delay of Full Implementation until 2023

• The broader application of Section 871(m) has again been delayed, this time until January 1, 2023 and as a result, investment funds with non-U.S. feeders or investors up the chain should generally expect to incur U.S....more

Holland & Knight LLP

Main Effects of U.S. Tax Reform on Foreign Taxpayers

Holland & Knight LLP on

President Donald Trump signed the U.S. tax reform bill previously entitled the Tax Cuts and Jobs Act into law on December 22, 2017, enacting comprehensive U.S. tax reform with most provisions becoming effective starting on...more

Orrick, Herrington & Sutcliffe LLP

IRS Releases Transition Guidance for the Dividend Equivalent Rules

On December 2, 2016, the Internal Revenue Service (the “IRS”) issued Notice 2016-76 (the “Notice”), which provides highly anticipated guidance regarding “dividend equivalent” payments under section 871(m) of the Internal...more

Dechert LLP

Much-Anticipated Section 871(m) Dividend Equivalent Guidance Provides Promised Transition Relief

Dechert LLP on

The U.S. Internal Revenue Service (the “IRS”) has released Notice 2016-76, providing anticipated guidance and transition relief for certain dividend equivalent transactions described in section 871(m) of the U.S. Internal...more

Cadwalader, Wickersham & Taft LLP

IRS Phases in Section 871(m) Dividend Equivalent Withholding

On December 2, the U.S. Internal Revenue Service issued Notice 2016-76, which phases in the application of withholding on dividend equivalent payments under section 871(m). Under the notice, withholding applies only to...more

Cadwalader, Wickersham & Taft LLP

Proposed QI Agreement Addresses Cascading Withholding on Dividend Equivalents

On July 1, the U.S. Internal Revenue Service issued Notice 2016-42, which proposes changes to the qualified intermediary (QI) agreement to address cascading U.S. withholding tax on dividends and “dividend equivalents”...more

Latham & Watkins LLP

Treasury Targets Related-Party Debt with Proposed Regulations to Treat Debt as Equity

Latham & Watkins LLP on

Proposed regulations would establish a sweeping framework to treat debt as equity in an effort to curb the use of “excessive” related-party debt. On April 4, 2016, the US Department of the Treasury (Treasury) and the...more

Morrison & Foerster LLP

MoFo Tax Talk - Volume 8, No. 4

IRS PROVIDES RICS ALTERNATIVES TO ACCOUNT FOR FOREIGN TAX REFUNDS - Generally, when a U.S. taxpayer pays foreign tax, the U.S. taxpayer is entitled to take a credit (a “Foreign Tax Credit”) against the taxpayer’s U.S....more

Cadwalader, Wickersham & Taft LLP

New 871(m) Regulations Finalize Dividend Equivalent Payment Withholding Rules for Equity Derivatives

On September 17, 2015, the IRS and the Treasury Department issued final, temporary, and proposed regulations under section 871(m) of the Internal Revenue Code (collectively, the “new regulations”) that provide the rules for...more

Morrison & Foerster LLP

Final and Temporary Dividend Equivalent Regulations Issued – Some Good, Some Bad, and Some Ugly

On September 17, 2015, the Internal Revenue Service (“IRS”) released final and temporary regulations under Section 871(m), the Internal Revenue Code provision that treats “dividend equivalents” paid under certain contracts as...more

Morrison & Foerster LLP

IRS Releases Final and New Proposed Regulations That Define “Dividend Equivalent” for U.S. Withholding Tax Purposes

Morrison & Foerster LLP on

On December 5, 2013, the Internal Revenue Service (“IRS”) finalized temporary regulations and issued new proposed regulations under Section 871(m), the Internal Revenue Code provision that treats “dividend equivalents” paid...more

Cadwalader, Wickersham & Taft LLP

Final And Proposed Regulations Address U.S. Withholding Tax On U.S. Equity Derivatives

I. Introduction - On Tuesday, December 4, the IRS and the Treasury Department issued proposed regulations that, if finalized as proposed, would dramatically increase the extent to which U.S. withholding tax is imposed...more

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