The U.S. Internal Revenue Service has issued a new tax provision under Section 1446(f) of the Internal Revenue Code (“IRC”), which primarily impacts non-U.S. persons who invest in Publicly Traded Partnership. With effect from 1 January 2023, such investors will incur a 10% withholding tax on gross proceeds from disposals and an additional 10% withholding tax on cash distributions.
Please click here for more information from IRS about the change. We assume no responsibility for the accuracy and completeness of the identified PTP instruments and encourage you to review your investment portfolio to close or transfer out any existing holdings in U.S. PTP securities immediately.
Why can't Saxo offer US PTP securities?
The US withholding tax process for publicly traded partnerships is a complex process and Saxo along with many other banks and brokers have decided they do not have the framework to support the new requirements, and therefore remove these from their offering.
Please note that some PTPs have submitted a Qualified Notice and that may mean an exemption of the 10% withholding, however these securities are also not supported by Saxo, as they still entail the same regulatory and report burden, and must be transferred out or disposed of immediately.
Which instruments are affected?
You can identify the instruments in the trading platform. The instruments has the suffix “(PTP)” in the instrument description.
Do note that instruments marked with “(PTP)” is non-exhaustive and subject to change at any time without prior notice. The products apply to both stocks/ETFs and stock options. CFDs of those products are not affected. You can continue to trade the CFDs of those products.
Which brokers will continue to offer US PTP securities?
We are unable to advise.
Is it possible to delay the force close of positions after the deadline?
No, unfortunately, this is not possible, all PTP positions must be transferred out of Saxo or disposed of before the given deadline.
Can I transfer the instruments out to other banks/brokers?
Yes, you can. How to transfer shares
Before initiating the transfer, please ensure that receiving bank/broker is able to receive and has the capacity to process the transfer and complete the process before the given deadline. Any impacted PTP positions held with Saxo after the given deadline may be sold without further notice.