Important Notice: New withholding tax on the US Publicly Traded Partnerships (“PTP”) Securities

2022-11-25 11:36:38

The US Internal Revenue Service (“IRS”) has issued a new provision under Section 1446(f) of the Internal Revenue Code (“IRC”) that primarily impacts non-US Persons who invest in US PTP Securities. With effect from 1 January 2023, non-US Persons will incur a 10% withholding tax on gross proceeds from sales or trading of US PTP securities.

In view of the complexity of Section 1446(f) withholding tax, Tiger Brokers (Singapore) Pte. Ltd. (“TBSPL”) will be taking the following actions:

  1. Starting from 1 December 2022, Tiger Brokers (Singapore) Pte. Ltd. (“TBSPL”) will cease to accept orders to open positions on US PTP securities and relevant derivatives, and share transfer-in requests for US PTP securities;
  1. By the market close of 28 December 2022,  clients who hold such US PTP securities can choose to sell their positions to avoid incurring the additional withholding tax described above. Starting from 29 December 2022, Tiger Brokers (Singapore) Pte. Ltd. (“TBSPL”) will cease to accept orders to close positions on US PTP securities, and clients could choose to transfer the above positions to other brokers;
  1. For clients holding the derivatives of US PTP securities, please kindly note that 10% withholding tax also applies to any sales of US PTP securities arising from option exercise/assignment on and after 1 January 2023, and clients will not be able to close the long positions of US PTP securities resulting from option exercise/assignment at Tiger Brokers (Singapore) Pte. Ltd. (“TBSPL”) on and after 29 December 2022, but clients could choose to transfer the above positions to other brokers.

 

Please click here for more information on the US PTP withholding tax and here for the list of US PTP securities. Kindly note that the US PTP securities list is non-exhaustive and may change at any time.

The above arrangements are subject to changes from time to time, and we may inform you through further notice. Alternatively, if you have any questions, our client service team is on standby to take your call at +65 6331 2277 or you may also email us at service@tigerbrokers.com.sg.