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Those details fans will have overlooked the strange, parallel universe of taxation. Here it is presence and not legal personality is important. Specifying that your counterparty may trade from its offices in, for example, [[Prague]], [[Kabul]] or [[The Sudan]] may impact the tax payable on payments under the relevant transactions under the [[ISDA]]. Where both parties are multibranch parties and have numerous overseas branches, a complex multilateral analysis of all the different permutations is assured. | Those details fans will have overlooked the strange, parallel universe of taxation. Here it is presence and not legal personality is important. Specifying that your counterparty may trade from its offices in, for example, [[Prague]], [[Kabul]] or [[The Sudan]] may impact the tax payable on payments under the relevant transactions under the [[ISDA]]. Where both parties are multibranch parties and have numerous overseas branches, a complex multilateral analysis of all the different permutations is assured. | ||
Quoth, elegantly, the | Quoth, elegantly, the a wise man (now departed): | ||
:"The risk for | :"The risk for a counterparty is essentially a [[withholding tax]] gross-up risk. If withholding tax arises in relation to a payment made to a counterparty through our NYK office, and the counterparty hasn't provided us with evidence of an exemption from withholding, the counterparty may argue that we may be obliged to [[gross-up]] the payment on the basis that, but for our failure to disclose to them that payments may be made from NYK, they would have provided evidence of their exemption. So, by failing to disclose that USD payments will originate in NYK, we make a misrepresentation by omission of something that may be material to the counterparty. | ||
:"So you end up in a double-jeopardy, in that counterparties may refuse to make a US {{isdaprov|Payee Tax Representation}} on the grounds that, in the absence of the disclosure that NYK is | :"So you end up in a double-jeopardy, in that counterparties may refuse to make a US {{isdaprov|Payee Tax Representation}} on the grounds that, in the absence of the disclosure that NYK is our settlement centre, there's nothing to convince them that payments will be made to them (as Payee) from NYK. So, no [[Payee Tax Representation]] (or [[W-8BEN]] form) + no multibranch election = potential withholding tax gross up by us. And/or a possible Misrepresentation [[Event of Default]]". | ||
:"Of course there are other ways to get around it: disclosure of the branch in a Confirmation (operational risk, and of no use in electronically booked txns), or more detailed reps in Part 5 - but none is as simple or uncomplicated as simply putting "New York" in the Multibranch election" | :"Of course there are other ways to get around it: disclosure of the branch in a Confirmation (operational risk, and of no use in electronically booked txns), or more detailed reps in Part 5 - but none is as simple or uncomplicated as simply putting "New York" in the Multibranch election" |