Important Announcement: New withholding tax on US Publicly Traded Partnerships (PTP) SecuritiesLast Updated: May 24, 2023
The U.S. Internal Revenue Service (IRS) has issued a new provision under Section 1446(f) of the Internal Revenue Code (IRC) that primarily impacts Non-U.S. Residents who invest in PTP Securities. Unless an exception applies, a 10% withholding tax applies to:
1. Gross proceeds from the sale of a PTP
2. Certain PTP distributions (e.g. dividends)
This new withholding tax will be applied on trades of PTP Securities with effect from 1 January 2023.The above withholding tax is over and above the existing withholding tax of 37% on PTP distributions. While we continue to engage our US partners regarding this new IRC provision, PSPL will continue to accept buy and sell orders, and share transfer requests for PTP securities until further notice. Further updates may be expected as we get more clarity from our U.S. partners
Please note that with effect from 1 January 2023, there may be an additional 10% withholding tax applied on gross consideration on sales of PTP securities to you as per IRC Section 1446(f). If you are holding any PTP securities, we suggest that you review your investment portfolio and take appropriate actions to avoid the possible impact of holding such securities from 1 January 2023.
Please click here to access the possible list of PTP securities obtained from external sources. Kindly note that it is not an exhaustive list of all PTP securities that are in scope for Section 1446(f). The list may be subject to change from time to time without prior notice. PSPL assumes no responsibility for the timeliness, accuracy and completeness of this list. If the sale of security (from 1 January 2023 onwards) is not listed in the provided PTP list but falls under PTP classification, PSPL reserves the right to claim the withholding tax from you to satisfy IRS withholding requirements.
If you have further queries on this, please contact your Trading Representatives.