IRS eyes US equity-linked notes in offshore crackdown

Substantial tax on “dividend equivalents” though questions remain

marc-saffon
Marc Saffon, Societe Generale

Non-US buyers of structured products that reference US stocks will be among those hit with a higher tax bill when Internal Revenue Service rules meant to curb so-called 'dividend washing' trades become effective in 2016.

The draft regulation, which closed for public comments on March 5, will apply a 30% tax to products such as reverse convertibles, autocallables and buffered notes to the extent the products pay out "dividend equivalents" that originate from an underlying US stock.

The tax hits

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: