The U.S. Internal Revenue Service (IRS) has issued a new provision under Section 1446(f) of the Internal Revenue Code (IRC) that primarily impacts Non-U.S. Residents who invest in PTP securities. Please review the full announcement in the link below:
https://www.irs.gov/individuals/international-taxpayers/partnership-withholding
What does this mean?
Unless an exception applies, from 1 January 2023 a new 10% withholding tax applies to
1) Gross proceeds from the sale of a Publicly Trading Partnership security (PTP) and
2) Certain PTP distributions
If you sell PTP securities on or after 1 January 2023 you will be subjected to the below tax implications as well as additional administrative fees. As we expect the demand for these securities to decrease and to maintain our low brokerage costs to you, Selfwealth through their trading partner PhillipCapital will no longer accept buy trading on securities that are incorporated in the attached list.
Section 1446 Withholding Tax
|
Withholding Type |
When can it apply? |
What are the withholding rates? |
Is this an existing or new requirement? |
|
Section 1446(f) |
PTP sales, and certain PTP Distributions |
10%, 0% |
New (With effect from 1st Jan 2023) |
What stocks are affected?
Example: On January 10th 2023, Andrew sells $10,000 USD value of stock in a PTP security he held. He would be charged 10% withholding tax on the gross sale proceeds, which equates to $1,000.
A recent report identified the attached list of securities that may be impacted by these changes. This list is for reference only and is not an exhaustive list of all PTP securities that are in scope for Section 1446(f). It may be subjected to changes from time to time without prior notice. Phillip Securities assume no responsibility for the timeliness, accuracy and completeness of this list. Selfwealth and Phillip Capital reserve the right to amend or change trading restrictions on the listed securities.
Selfwealth cannot provide any tax advice, you may want to consult a registered tax professional.