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Yes! You’re right! They invested in swaps all the time! | Yes! You’re right! They invested in swaps all the time! | ||
The HIRE Act, by amending Section 871(m), clamps down on naughty foreigners avoiding [[withholding tax]] for dividends on US [[Share - Equity Derivatives Provision|equities]] and provides that everyone gets taxed at the same rate. | The [[HIRE Act]], by amending [[Section 871(m)]] of the [[Inland Revenue Code]], clamps down on naughty foreigners avoiding [[withholding tax]] for dividends on US [[Share - Equity Derivatives Provision|equities]] and provides that everyone gets taxed at the same rate. | ||
The new regulations establish up to a 30% [[withholding tax]] on foreign investors on dividend-equivalent payments under [[equity derivative|equity derivatives]]. | The new regulations establish up to a 30% [[withholding tax]] on foreign investors on dividend-equivalent payments under [[equity derivative|equity derivatives]]. | ||
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The calculation is cumulative so even if the delta threshold isn’t met in one transaction, it may be as a result a connected transaction. (Foiled, tricksy foreigners!) | The calculation is cumulative so even if the delta threshold isn’t met in one transaction, it may be as a result a connected transaction. (Foiled, tricksy foreigners!) | ||
===Documentationary things=== | |||
There is an ISDA-sponsored Hire Act Protocol you can sign up to, and a standardised amendment to Section 2(d) of the ISDA to take account of the Hire Act and make sure all your reporting is right. |