White Label Clients White Label Clients
Monthly Notification, Saxo Bank
21 December 2016

Impact of new US tax regulation

​​Relevant for clients that have or are considering trading single stock CFDs with a  US equity as underlying asset.IRS Section 871(m) is a new pie...

​​Relevant for clients that have or are considering trading single stock CFDs with a  US equity as underlying asset.

IRS Section 871(m) is a new piece of regulation from the  US tax authority (the 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 an 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 witholding tax on behalf of the clients that trade CFDs with a US Equity as underlying asset.

Next steps for White Labels

As you may know, tax withholding will be based on your US tax status and how you wish Saxo Bank to treat your underlying clients. Our treatment of your underlying clients will be based on how you have classified them towards Saxo Bank.

If you are QI, but have not yet declared this to Saxo Bank, the following steps have to be completed by 31 December, 2016:

  1. You submit a completed W-8IMY form to Saxo Bank (to entityonboarding@saxobank.com);
  2. Saxo Bank enables your structure for Relief at Source;
  3. You enable your documented clients for Relief at Source, ensuring you select both the relevant Tax Country and the Document Type.

Should you intend to become a QDD, please let us know – but note that Saxo Bank will continue to withhold tax on behalf of your clients.

If we do not have any US tax forms on file, and/or your underlying aren’t enabled for Relief at Source, we will withhold at the default tax rate.

Further details will be available soon on the Regulation page under Partner Tools in the Institutional Marketing Portal. If you have any questions, please contact your Account Manager.