The hidden credit risk in US tax reforms

IRS's Section 871(m) rule poses huge problems for US and European structured products issuers

hidden dangers

Alain Bigar is head of strategy and corporate development, and Dimitrios Karyampas is director of Platform Partners, both at Leonteq Securities. The opinions expressed are those of the authors.

Tax is always a touchy subject, perhaps never more so than when it is applied across borders. That certainly looks to be the case with forthcoming changes to the US tax regime, contained in Section 871(m) of the Internal Revenue Code, which will impose a 30% withholding tax on dividend-equivalent payment

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