Institutional Clients Institutional Clients
Monthly Notification , Saxo Bank
21 December 2016

Impact of new US tax regulation

​IRS Section 871(m) is a new piece of regulation from the US tax authority (IRS) and the US Treasury Department. Its aim is to impose tax on divide...

​IRS Section 871(m) is a new piece of regulation from the US tax authority (IRS) and the US Treasury Department. Its aim is to impose tax on dividend-equivalent payments for derivative instruments with a US-based underlying equity. The regulation will come into effect on January 1st 2017. Positions entered into on or after this date will be subject to tax on any dividend payment. Listed options with a US equity as underlying asset will also be covered by similar legislation from January 1st 2018.

Starting on January 1st, 2017 Saxo Bank will process, withhold and pay dividend tax on behalf of the clients that trade CFDs with a US equity as underlying asset.

If you currently trade or plan to trade single stock CFDs with a US equity  as underlying asset in 2017, please make sure we have your relevant tax documentation at hand as soon as possible – if not already provided to Saxo​ Bank. Based on the information we have on file, we will provide you with relief at source when applicable also for your US CFD positions. If we do not have any tax documentation on file from you, we will withhold at the default tax rate.