What is the withholding tax on Publicly Traded Partnerships (“PTP”) Securities?

Pursuant to Internal Revenue Code (IRC) Sections 1446(a) and 1446(f) of the US IRS starting from January 1, 2023, the sale or transfer of Publicly Traded Partnership (“PTP”) securities by a non-US person shall be subject to the following withholding tax:

Sale or transfer of PTP securities shall be subject to a withholding tax equal to 10% of the transaction amount;

Dividends/ interest from PTP securities shall be subject to a withholding tax equal to 37% (applicable to individual investors) or 21% (applicable to companies or institutional investors) of the dividends.

Based on the current IRS announcements, decrees and List of PTP Securities, the relevant implementation may be adjusted due to future changes in response to the IRS announcement.. Webull will not notify any changes in the relevant laws and regulations on PTP products. Please seek advice from an independent tax advisor to determine whether you will be subject to the new U.S. withholding tax and additional reporting requirements.

References:

IRS Requirements on PTP Products

IRS Regulations on the Withholding Tax on PTP Transactions