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Treasury Issues Revised Proposed and Final Regulations for Section 871(m)


Section 871(m) of the Internal Revenue Code was enacted as part of the HIRE Act of 2010. This section imposes a withholding tax of 30 percent, which may be reduced by treaty; on non-U.S. persons with respect to dividend equivalent amounts received or deemed received pursuant to various derivative instruments, as well as on substitute dividends received under stock lending arrangements.

In January 2012, under broad authority to define a U.S. source dividend provided by section 871(m), Treasury and the Internal Revenue Service issued temporary and proposed regulations providing guidance on how the rules would be implemented. View regulations here. The temporary regulations were scheduled to expire on December 31, 2013 and the proposed regulations were scheduled to become effective for payments made on or after January 1, 2014. In response to many comments received from industry, under the new guidance issued on December 5, 2013, the temporary regulations have essentially been converted to final regulations with minor changes and will remain in effect until December 31. 2015. The 2012 proposed regulations have been revoked and a new set of proposed regulations, the 2013 proposed regulations, have been issued. The 2013 proposed regulations are intended to take effect for payments made on or after January 1, 2016 and they will entirely replace the 2013 final regulations

Download the PDF for additional information on 871(m) proposed and final regulations.

Contact information

For additional information or questions, please contact:

Ted Dougherty
National Managing Partner, Investment Management Tax
Deloitte Tax LLP
+1 212 436 2165
  Eric Fox
Deloitte Tax LLP
+1 203 905 2618
Craig Gibian
Deloitte Tax LLP
+1 202 220 2637
  Paul Epstein
Deloitte Tax LLP
+1 202 758 1390


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