The Hungarian Social Contribution Tax

Overview: 

The Hungarian Government passed a new bylaw, Government Decree 205/2023 (V.31) on 31 May, 2023, that requires Hungarian financial providers to withhold a Social Contribution Tax on certain capital gains and interest payments and remit these amounts directly to the government. 

 

You will find the answers to the main questions below:

 

What type of interest is subject to the Hungarian Social Contribution Tax (TAX)?

Interest coupon payments on Bonds, ETFs, closed-end ETFs and mutual funds purchased after July 1, 2023 are subject to the TAX.

 Bonds – on both the coupon payment and the capital gains.

ETFs, Closed End Funds and Mutual Funds – The dividend payment is considered as interest and therefore subject to this tax.

ETFs, Closed End Funds and Mutual Funds that are traded in non-EEA or other countries that do not have a tax treaty with Hungary are subject to the Capital Gain Tax.

 

What is the standard TAX Rate?

The standard TAX rate is 13%.

 

If I earn interest through Bond Coupons, am I required to pay the TAX?

Yes.

 

When is the 13% TAX rate applied to my account?

The 13% TAX rate is applied to your account on the date when the interest coupon or the proceeds on the sale of certain types of ETFs and mutual funds (see above) are credited to your account. You will find the withheld TAX amount as a separate line item in your Activity Statement.

 

What currency is used for the TAX?

The TAX is withheld in the same currency in which the interest coupon or proceeds have been credited.

 

I am not a Hungarian resident. Do I have to pay the TAX?

Non-Hungarian residents are not affected by the TAX. The TAX is withheld based on the declaration provided by you on your tax residency. 

 

Does the TAX apply to clients who are companies?

No.

 

Does the TAX apply to interest I earn through the Cash Yield Enhancement Program?

No.

 

Does the TAX apply to interest I earn through the Stock Yield Enhancement Program?

Under the existing rules, the TAX may apply to your interest earned through the Stock Yield Enhancement Program.

 

Why is trading of tax-impacted instruments limited?

Due to the duration between the announcement of the bylaw and its effective date, IB is unable to deploy the required tax withholding properly across its full global product set. To ensure correct adherence to the regulation, we must temporarily limit the ability to open new positions in affected products. Closing transactions in pre-existing positions will not be impacted. We will inform you as soon as the trading restrictions for the tax-impacted instruments have been removed. 

Irish Tax Withholding Reclaim Process

Overview: 

Interactive Brokers Ireland Limited (IBIE) must apply Irish withholding tax of 20% on credit interest paid to certain clients, including natural persons. However, you may be able to reclaim some or all of the tax withheld, if you are resident in a country with a Double Taxation Treaty (DTT) with Ireland, which includes all EEA countries.

To reclaim withholding tax, you must complete Form IC7. This article explains how to do this. You can find the form at this link:  

https://www.revenue.ie/en/self-assessment-and-self-employment/documents/form-ic7.pdf

You may also be interested in our explanation on how to apply for an exemption from or reduction in the rate of withholding tax applicable to your future credit interest payments, which you can find here. 

How to Reclaim Withholding Tax

Step 1:  Complete the following information:

1.       Under section entitled Name of claimant – please fill in full Capital Letters.

Full Name,

Foreign Tax Ref. No.

Revenue File Ref. No. (If known.)

Address:

Tel No.:

E-mail:

 

2.       Under section entitled Agent – only complete this section if you would like enquiries to be sent to your Agent.

Name:

Address:

Tel No.:

E-mail:

 

 

Step 2:  Answer and complete questions numbered 1-6,

 

QUESTION

ANSWER

1

Please state the name, address and Irish tax reference number of the Irish entity making the payments.

Interactive Brokers Ireland Limited

North Dock One, 91/92 North Wall Quay, Dublin 1 D01 H7V7, Ireland

TRN: 3674050HH

2

State the relationship, if any, between you and the Irish entity making the payments.

Client

3

Please confirm that the payments are made on ‘an arms length Basis’

Confirmed: All credit interest payments made by IBIE to clients are on an arm’s length basis

4

Please state the rate of the payments

Variable

5

Please state the date of the first payment

Please refer to the annual statement to determine date of first payment (available on client portal).

6

Please state the term of the Agreement.

Indefinite

7

Is the payment in question arising from a Permanent Establishment (P.E.) or fixed base maintained by you in Ireland

Please complete

 

Step 3:  Complete the declaration with your country of residence in both blank sections.

Step 4: Sign and date the Form underneath the declaration.

Step 5: Insert the amount you are claiming following “Amount Claimed”.

You can find the amount claimed on Form R185, which is available in IBIE’s client portal in the Tax Forms (see the section marked Tax Deducted).

“Amount Claimed in €________: if claiming a refund of Irish tax on payments already made”

Step 6:  Complete the section on payment details in the next box, include details of the account to which you wish to receive the payment from Revenue.

Step 7: Ensure the last section is completed and stamped by the tax authority in your country of residence.

 

Note: If your tax authority will not stamp the form, Irish Revenue may accept a certificate of tax residence, which can be attached instead of having that section completed.

 

Step 8:

Post or email the following to International Claims Section, Office of the Revenue Commissioners, Nenagh, Co Tipperary, E45 T611, Ireland or intclaims@revenue.ie:

i)                    Form IC7,

ii)                   Form R185 (which is available in IBIE’s client portal in the Tax Forms section),

iii)                 The IBIE Customer Agreement found at this link or alternatively you can just send the link to the customer agreement (in the email or in a cover letter via post), https://www.interactivebrokers.ie/en/accounts/forms-and-disclosures-client-agreements.php, and

iv)                 Your certificate of tax residence (if required):

How to Contact Irish Revenue

If you have any questions regarding the form, please contact Irish Revenue (Tel No.: +353 1 7383634 E-email: intclaims@revenue.ie).

 

 

Withholding on Publicly Traded Partnerships (“PTPs”) Effective Jan 2023

Background: 

As a result of U.S. Internal Revenue Regulations taking effect 1 January 2023, new withholding charges will be applied to sales proceeds from certain Publicly Traded Partnerships ("PTPs”) held by investors who are not U.S. taxpayers.  The IRS withholding charges are substantial, therefore, Interactive Brokers has taken steps to limit access to these products for investors who might be unaware of the risks of investing in these PTP products.

 Instructions on How to Access PTP Products are available below in this document.

What you need to know:

Amount of Withholding: 10% of sale or distribution proceeds.  This means 10% of the amount of funds that would settle resulting from any transaction or distribution, not just 10% on any calculated profit.

Example of PTP withholding:

Buy 200 shares @ 50. 
Transaction value = $10,000
Sell 200 shares @ 51. 
Transaction value = $10,200
Profit = $200. 
Withholding = $1020 USD

Assuming no tax reclaim requests, the loss in value to the investor would be $820

Affected Instruments: Please see the list at the end of this article.  The list is maintained on a best efforts basis and there may be some timing issues as information is refreshed.  Listed deliverable securities are in scope of the new regulation. Options and other derivative instruments with a PTP as the underlying security are not subject to withholding. However, if the option or derivative is converted into a PTP interest, a subsequent sale of such PTP security would be subject to withholding.

Special Exemptions: The IRS regulation provides issuers the ability to get an exemption from the PTP withholding requirement.  The exemption is valid for 92 days, and issuers are required to re-certify with the IRS to extend the duration of the exemption. IBKR will try, on a best-efforts basis, to publish which of the affected instruments have an operating exemption, but investors should ensure they are choosing products whose withholding conditions they fully understand.  The issuer document that provides for a withholding exemption is generally referred to as a "Qualified Notice"

What Investors are affected: All investors who are not considered ‘resident’ for U.S. tax purposes, i.e. investors who are not subject to U.S. taxation and tax reporting (and therefore doesn't file a W-9 IRS tax form).

Reporting: Withholding will be reported on the year-end Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding. 

How to Access PTP Products as a Non-US Taxpayer:  Please login to Client Portal and select the User menu (head and shoulders icon in the top right corner) followed by Settings. Then under Account Settings find the Trading section and click on the “PTP Trading Opt In/Out” link. The webpage allows you to request the ability to trade PTP securities. Once the request is submitted, it may take up to one hour for the ability to be activated.

Note that clients who no longer desire to trade PTP securities may request to deactivate the PTP trading ability via the same “PTP Trading Opt In/Out” link.

Additional Resources: For those interested in understanding additional information about the new regulation, please see the IRS website for IRC Sec. 1446(f): http://www.irs.gov/individuals/international-taxpayers/partnership-withholding

PTP Instruments

This list identifies PTP securities which may be subject to withholding under the IRS Regulation referenced above. The products are presented in 2 groups: those with a "Qualified Notice” exemption, and those "without Qualified Notice".  The lists are shown on a best-efforts basis for convenience only.  IBKR does not guarantee the accuracy or timeliness of the information, and investors should independently verify that products in which they are invested in, or intend to invest, have the necessary exemptions to avoid punitive withholding outcomes.  Duration of the exemptions should also be monitored by position holders in the instruments.


PTP Securities with known Qualified Notice

 Last updated 30-08-2023

ISIN Symbol Name
BMG540501027 LAZ LAZARD LTD-CL A
US46428R1077 GSG ISHARES S&P GSCI COMMODITY I
BMG162521014 BIP BROOKFIELD INFRASTRUCTURE PA
US74347W8745 ULE PROSHARES ULTRA EURO
US74347W8828 EUO PROSHARES ULTRASHORT EURO
US74347W6012 UGL PROSHARES ULTRA GOLD
US74347W5691 YCS PROSHARES ULTRASHORT YEN
BMG162581083 BEP.UN BROOKFIELD RENEWABLE PARTNER
US74347W3951 GLL PROSHARES ULTRASHORT GOLD
BMG162581083 BEP BROOKFIELD RENEWABLE PARTNER
CA3874371147 GRT.UN GRANITE REAL ESTATE INVESTME
CA3874371147 GRP U GRANITE REAL ESTATE INVESTME
CA16141A1030 CSH.UN CHARTWELL RETIREMENT RESIDEN
JP3047550003 3283 NIPPON PROLOGIS REIT INC
CA0266951064 HOT.UN AMERICAN HOTEL INCOME PROPER
GG00BBHXCL35 RSE RIVERSTONE ENERGY LTD
US74347W3530 AGQ PROSHARES ULTRA SILVER
US74347W3381 VIXM PROSHARES VIX MID-TERM FUT
MXCFFI170008 FIBRAPL14 PROLOGIS PROPERTY MEXICO SA
CA76090H1038 QSP.UN RESTAURANT BRANDS-EXCH UNITS
CA76090H1038 RSTRF RESTAURANT BRANDS-EXCH UNITS
BMG162521279 BIP.PR.A BROOKFIELD INFRASTRUCTUR
US74347W2706 YCL PROSHARES ULTRA YEN
GG00BYV2ZQ34 RGL REGIONAL REIT LTD
BMG162521436 BIP.PR.B BROOKFIELD INFRASTRUCTUR
BMG162341090 BBU BROOKFIELD BUSINESS PT-UNIT
SG1CI1000004 BTOU MANULIFE US REAL ESTATE INV
CA70214T1194 PVF.UN PARTNERS VALUE INVESTMENTS I
CA70214T1012 PVF.PR.U PARTNERS VALUE INVEST LP
SG1EA1000007 CMOU KEPPEL PACIFIC OAK US REIT
US26923H2004 BDRY BREAKWAVE DRY BULK SHIPPING
US6740013007 OAK PRA OAKTREE CAPITAL GRP LLC
US46138B1035 DBC INVESCO DB COMMODITY INDEX T
US46140H2058 DBS INVESCO DB SILVER FUND
US46140H1068 DBA INVESCO DB AGRICULTURE FUND
US46140H6018 DGL INVESCO DB GOLD FUND
US46140H7008 DBB INVESCO DB BASE METALS FUND
US46140H3049 DBE INVESCO DB ENERGY FUND
US46140H5028 DBP INVESCO DB PRECIOUS METALS F
US46139B1026 DBV INVESCO DB G10 CURRENCY HARV
US46140H4039 DBO INVESCO DB OIL FUND
US46141D2036 UUP INVESCO DB US DOLLAR INDEX B
US46141D1046 UDN INVESCO DB US DOLLAR INDEX B
US6740014096 OAK PRB OAKTREE CAPITAL GRP LLC
US74347W1302 SVXY PROSHARES SHORT VIX ST FUTUR
BMG162491499 BPYPP BROOKFIELD PROPERTY PART
BMG162522269 BIP.PR.F BROOKFIELD INFRASTRUCTUR
SGXC75818630 OXMU PRIME US REIT
BMG162491564 BPYPO BROOKFIELD PROPERTY PART
BMG162522004 BIP.PR.E BROOKFIELD INFRASTRUCTUR
BMG162581083 BXE.EUR BROOKFIELD RENEWABLE PARTNER
BMG162491648 BPYPN BROOKFIELD PROPERTY PART
BMG162582313 BEP PRA BROOKFIELD RENEWABLE PAR
SGXC39411175 ODBU UNITED HAMPSHIRE US REIT
US37959R1032 GBLI GLOBAL INDEMNITY GROUP LLC-A
US0917491013 BITW BITWISE 10 CRYPTO INDEX FUND
BMG162522756 BIP PRB BROOKFIELD INFRASTRUCTUR
CA85554C1041 SCPT.A STRLIGHT US MLTI-FAM 2 CORE
US74347Y8479 ZSL PROSHARES ULTRASHORT SILVER
BMG1624R1079 BPYPM NEW LP PREFERRED UNITS CAD
BMG1624R1079 BPYP.PR.A NEW LP PREFERRED UNITS CAD
SGXC50067435 DCRU DIGITAL CORE REIT MANAGEMENT
CA70214T2002 PVI.II PARTNERS VALUE INVESTMENTS LP
CA70214T3091 PVI.III PARTNERS VALUE INVESTMENTS LP SERIES 3
CA70214T4081 PVI.IIII PARTNERS VALUE INVESTMENTS LP SERIES 4
US26800L1008 WEIX DYNAMIC SHORT SHORT
US74347Y7976 SCO PROSHARES ULTRASHORT BLOOMBE
US74347Y8131 KOLD PROSHARES ULTRASHORT BLOOMBE
US21258A2015 SPKX CONVXTY SHS 1X SPIKES FUTUR
US21258A1025 SPKY CONVXTY SHS DAILY 1.5X SP FU
US74347Y7638 BOIL PROSHARES ULTRA BLOOMBERG NA
US74347Y7893 VIXY PROSHARES VIX SHORT-TERM FUT
US74347Y7711 UVXY PROSHARES ULTRA VIX ST FUTUR
US161239AC25 IBCID66377068 161239AC2  11/30/50
US161239AE80 IBCID66377074 161239AE8 6.8 11/30/50
US161239AN89 IBCID66419451 161239AN8  12/31/45
US161239AA68 IBCID67286674 161239AA6  06/30/49
US161239AB42 IBCID67286679 161239AB4  06/30/49
US161239AM07 IBCID67287230 161239AM0 6.3 12/31/45
US247134AA79 DFG DFG 9.31 03/25/27
US05562EAA64 BNP BNP 7.738 PERP
US44921RAA23 MIZUHO MIZUHO 8.79 PERP
US359577AA19 MIZUHO MIZUHO 9.87 PERP
US718549AC27 PSXP PSXP 4.68 02/15/45
US29336UAH05 ENLK ENLK Float PERP
US29273VAG59 ET ET 4 1/4 03/15/23
US726503AE55 PAA PAA Float PERP
US29278NAA19 ETP ETP 6 1/4 PERP
US23311PAA84 DCP DCP 7 3/8 PERP
US29278NAB91 ETP ETP 6 5/8 PERP
US03350FAA49 ANDX ANDX 6 7/8 PERP
US19237JAA16 IBCID352663524 19237JAA1 0 08/01/47
US19237JAB98 IBCID352663531 19237JAB9 0 08/01/54
US31350ACJ51 IBCID359781802 31350ACJ5 3.05 04/15/34
US55336VAU44 MPLX MPLX 6 7/8 PERP
US29278NAS27 ETP ETP 6 3/4 PERP
US29278NAT00 ETP ETP 7 1/8 PERP
US29273VAL45 ET ET 6 3/4 PERP
US29273VAM28 ET ET 7 1/8 PERP
US29273VAJ98 ET ET 6 5/8 PERP
US29273VAH33 ET ET Float PERP
US29273VAN01 ET ET 6 1/2 PERP
US06749NUY65 BACR BACR 0 10/02/25
US40057T6Z22 GS GS 0 07/08/24

 

PTP Securities without Qualified Notices

Last updated 30-08-2023

 

ISIN Symbol Name
US1182301010 BPL BUCKEYE PARTNERS LP
US3152931008 FGPRQ FERRELLGAS PARTNERS-LP
US1501851067 FUN CEDAR FAIR -LP
US29250R1068 EEP ENBRIDGE ENERGY PARTNERS LP
US0309751065 APU AMERIGAS PARTNERS-LP
US40636T2033 HRY HALLWOOD RLTY PARTNERS L P
US3719271047 GEL GENESIS ENERGY L.P.
US6442061049 NEN NEW ENGLAND REALTY ASSOC-LP
US7328571077 POPE POPE RESOURCES
US2937921078 EPD ENTERPRISE PRODUCTS PARTNERS
US7265031051 PAA PLAINS ALL AMER PIPELINE LP
US01877R1086 ARLP ALLIANCE RESOURCE PARTNERS
US5733311055 MMLP MARTIN MIDSTREAM PARTNERS LP
US25820R1059 DMLP DORCHESTER MINERALS LP
US5590801065 MMP MAGELLAN MIDSTREAM PARTNERS
US29273R1095 ETP.OLD ENERGY TRANSFER PARTNERS LP
US4357631070 HEP HOLLY ENERGY PARTNERS LP
US37946R1095 GLP GLOBAL PARTNERS LP
US0966271043 BWP BOARDWALK PIPELINE PARTNERS
US23311P1003 DCP DCP MIDSTREAM L.P.
US1314761032 CLMT CALUMET SPECIALTY PRODUCTS
US29273V1008 ET ENERGY TRANSFER LP
US01881G1067 AB ALLIANCEBERNSTEIN HOLDING LP
US01861G1004 AHGP ALLIANCE HOLDINGS GP LP
US68268N1037 OKS ONEOK PARTNERS LP
US26926V1070 EVEPQ EV ENERGY PARTNERS LP
US1067761072 BBEPQ BREITBURN ENERGY PARTNERS LP
US34958B1061 FIG.OLD FORTRESS INVESTMENT GRP-CL A
US16411Q1013 CQP CHENIERE ENERGY PARTNERS LP
US67058H1023 NS NUSTAR ENERGY LP
US67059L1026 NSH.OLD NUSTAR GP HOLDINGS LLC
US55608B1052 MIC.USD MACQUARIE INFRASTRUCTURE HOL
US4511001012 IEP ICAHN ENTERPRISES LP
US30242M1062 XXFPL FFP PARTNERS -LP-CL A
US09625U1097 BKEP BLUEKNIGHT ENERGY PARTNERS L
US6546781013 NKA NISKA GAS STORAGE PARTNERS-U
US2128491030 CWPS CONWEST PARTNERSHIP LP-UNITS
US0548071028 AZLCZ AZTEC LAND & CATTLE LTD
US26827L1098 ECTM ECA MARCELLUS TRUST I
US38349K1051 GDVTZ GOULD INVESTORS LP
US5053461068 LAACZ LAACO LTD-UNITS OF LTD PRTNS
US1534231089 ENGY CENTRAL ENERGY PARTNERS LP
US62913M1071 NGL NGL ENERGY PARTNERS LP
US12547R1059 CIFC CIFC LLC
US02752P1003 AMID.OLD AMERICAN MIDSTREAM PARTNERS
US09625U2087 BKEPP BLUEKNIGHT ENERGY PARTNERS - SERIES A PREF UNIT
US1651851099 CHKR CHESAPEAKE GRANITE WASH TRUS
US5860481002 MEMPQ MEMORIAL PRODUCTION PARTNERS
US0293162055 ICTPU.OLD AMERICAN RESTAURANT PRTNR LP
US04941A1016 ARPJQ ATLAS RESOURCE PARTNERS LP
US6740012017 OAK OAKTREE CAPITAL GROUP LLC
US26885B1008 EQM EQM MIDSTREAM PARTNERS LP
US74347W7424 EUFX.OLD PROSHARES SHORT EURO ETF
US74347W4603 CROC PROSHARES ULTRASHORT AUD
US6658261036 NTI NORTHERN TIER ENERGY LP
US4283371098 HCRSQ HI-CRUSH INC
US55336V1008 MPLX MPLX LP
US24664T1034 DKL DELEK LOGISTICS PARTNERS LP
US02052T1097 ALDW ALON USA PARTNERS LP
US12663P1075 CVRR CVR REFINING LP
US48248A6038 KFN PRCL KKR FINANCIAL HOLDINGS
US64881E1091 NSLPQ NEW SOURCE ENERGY PARTNERS L
BMG162491077 BPY BROOKFIELD PROPERTY PARTNERS
US5327711025 LIN.OLD1 LIN MEDIA LLC - A
US7185492078 PSXP PHILLIPS 66 PARTNERS LP
US2921022099 OGCP EMPIRE STATE REALTY OP-S60
US2921023089 FISK EMPIRE STATE REALTY OP -S250
US2921021000 ESBA EMPIRE STATE REALTY OP LP-ES
US03879N1019 ARCX ARC LOGISTICS PARTNERS LP
US59564N1037 MEP MIDCOAST ENERGY PARTNERS LP
US29336U1079 ENLK ENLINK MIDSTREAM PARTNERS LP
US2924801002 ENBL ENABLE MIDSTREAM PARTNERS LP
US69318Q1040 PBFX PBF LOGISTICS LP
US22758A1051 CAPL CROSSAMERICA PARTNERS LP
US2574541080 DM.OLD DOMINION ENERGY MIDSTREAM PA
US12637A1034 CCLP CSI COMPRESSCO LP
US04929Q1022 ATLS.OLD ATLAS ENERGY GROUP LLC
US26923H1014 RISE SIT RISING RATE ETF
US09225M1018 BSM BLACK STONE MINERALS LP
US74347W2888 UCD PROSHARES ULTRA BLOOMBERG CO
US64881E3071 NUSPQ NEW SOURCE ENG PARTNERS LP 11%SR A
US3932211069 GPP GREEN PLAINS PARTNERS LP
US4038291047 GYRO GYRODYNE LLC
US1724641097 SIRE SISECAM RESOURCES LP
US03957U1007 APLP ARCHROCK PARTNERS LP
US2263442087 CEQP CRESTWOOD EQUITY PARTNERS LP
BMG162581323 BEP.PR.G BROOKFIELD RENEWABLE POW
US63900P6088 NRP NATURAL RESOURCE PARTNERS LP
US51508J2078 LMRKP LANDMARK INFRASTRUCTURE
BMG162521683 BIP.PR.C BROOKFIELD INFRASTRUCTUR
US65506L1052 NBLX NOBLE MIDSTREAM PARTNERS LP
US67058H2013 NS PRA NSUS 8 1/2 12/31/49
BMG162521840 BIP.PR.D BROOKFIELD INFRASTRUCTUR
US74347W2219 OILU.OLD PROSHARES ULTRAPRO 3X CRUDE
US67058H3003 NS PRB NSUS 7 5/8 PERP PFD
US29278N1037 ETP ENERGY TRANSFER OPERATING LP
US62913M2061 NGL PRB NGL 9 PERP PFD
US67420T2069 OMP OASIS MIDSTREAM PARTNERS LP
US0556EL1098 BPMP BP MIDSTREAM PARTNERS LP
US20855T1007 CCR CONSOL COAL RESOURCES LP
US67058H4092 NS PRC NUSTAR ENERGY LP
US12654A1016 CNXM CNX MIDSTREAM PARTNERS LP
US59140L1008 IDIV METAURUS US EQUITY CUMULATIV
US59140L2097 XDIV.OLD METAURUS US EQUITY EX DIVIDE
BMG162584053 BEP.PR.M BROOKFIELD RENEWABLE PAR
US74347Y8057 OILD.OLD1 PROSHARES ULTRAPRO 3X SHORT
US29278N3017 ETP PRC ENERGY TRANSFER PARTNERS
US23311P2092 DCP PRB DCP MIDSTREAM LP
US29278N4007 ETP PRD ENERGY TRANSFER PARTNERS
US37946R2085 GLP PRA GLOBAL PARTNERS LP
US23311P3082 DCP PRC DCP 7.95 PERP PFD - DCP MIDSTREAM LP
US64ESC19977 NYRT.ESC NEW YORK REIT INC - ESCROW
BMG162582156 BEP.PR.O BROOKFIELD RENEWABLE PAR
US62913M3051 NGL PRC NGL ENERGY PARTNERS LP
US29278N5095 ETP PRE ENERGY TRANSFER OPERATNG
SGXC28500103 LIW EAGLE HOSPITALITY TRUST
US2263443077 CEQP PR CRESTWOOD EQUITY PARTNER
KYG9325C1050 VTDRF VANTAGE DRILLING INTERNATION
US59560V2088 MCEP MID-CON ENERGY PARTNERS LP
US55406N2027 PFDM PFD MYT HLDG CO BE+
US55406N1037 MYTH MYT HLDG LLC BE+
US1266332055 UAN CVR PARTNERS LP
US36761Q1058 GWYGU GATEWAY GARAGE PARTNERS LLC
US37946R3075 GLP PRB GLOBAL PARTNERS LP
US29273V6056 ET PRE ENERGY TRANSFER LP 7.6% PERP PFD U
US29273V5066 ET PRD ENERGY TRANSFER LP 7.625% PERP PFD
US29273V4077 ET PRC ENERGY TRANSFER LP
US3152932097 FGPR FERRELLGAS PARTNERS-LP
US3152933087 FGPRB FERRELLGAS PARTNERS LP-B
US74347Y8396 UVXY.OLD PROSHARES ULTRA VIX ST FUTUR
US0806941029 OZ BELPOINTE PREP LLC
US092ESC0377 BGIO.ESC ESC BGIO LIQUIDATION TRUST
US02364V2060 GHI GREYSTONE HOUSING IMPACT INV
BMG162582644 BEP.PR.R BROOKFIELD RENEWABLE PAR
US28252B8046 EFSH 1847 HOLDINGS LLC
US41988L2025 NNUTU HAWAIIAN MACADAMIA NUT ORCHA
US26923H3093 BWET BREAKWAVE TANKER SHIP ETF
US30053M2035 SNMP EVOLVE TRANSITION INFRASTRUC 

 

 

Information on Irish Interest Withholding

Overview: 

The Irish Tax Authority requires IBKR to collect withholding tax on interest earned in Ireland. This withholding is at a rate of 20% and must be deducted from interest payments to your account.  

Please note withholding tax applies to all clients who are resident in Ireland, whether individuals (including partnerships) or companies. 

Withholding tax does not apply to clients who are companies in countries that are members of the European Union (excluding Ireland) or companies in countries that have a Double Tax Agreement (DTA) with Ireland.  

For other clients in the EU (excluding Ireland) or if you are a non-resident of Ireland but tax resident in a country with a Double Tax Agreement (DTA) with Ireland, you may complete Form 8-3-6, that will reduce or eliminate your withholding tax. In addition to providing your information, you will need to have the form completed by the tax authority in the country where you are a tax resident.

You will require the following information in order to complete Form 8-3-6.

 1.       Client name (please ensure this matches the name on your IBKR account).

 2.      Client address.

 3.       Tax reference number in country of residence.

 4.       The country in which the client is resident for tax.

 5.       The rate of withholding tax between the country of tax residence and Ireland (see below).

 6.       Signature.

 7.       Date.

On completion of the form, you should submit it to the local tax authority in the country of your residence.  The local tax authority must sign and stamp the form. As per below, Form 8-3-6 has been translated into French, German, Spanish, Italian and Dutch.

Once you receive the completed form from your local tax authority, please email a PDF or JPEG copy of the fully signed form to tax-withholding@interactivebrokers.com.

Please note, the withholding tax rate depends on the DTA between Ireland and your country of tax residence which can be found on the Irish Revenue website https://www.revenue.ie/en/tax-professionals/tax-agreements/rates/index.aspx

For your convenience, we have prepared the forms to include items 3 to 5 above for all countries in the European Economic Area (“EEA”).  Clients will need to complete the other items in 1 to 7 above.

For clients outside the EEA please use this form when the withholding tax rate is 0% and this form in all other cases.

 

1.         EEA countries with 0% Withholding Tax.

 

Austria

Denmark

Hungary

Netherlands/Formulier 8-3-6. Rente

Croatia

Finland

Iceland

Slovakia

Czech Republic

France/Form 8-3-6. Intérêts

Luxembourg

Spain/Formulario 8-3-6. Intereses

Cyprus

Germany/Formular 8-3-6. Zinsen

Malta

Sweden

 

2.       EEA countries with rates above 0% Withholding Tax.

 

Belgium

Greece

Lithuania

Romania

Bulgaria

Italy/Modulo 8-3-6. Interessi

Poland

Slovenia

Estonia

Latvia

Portugal

 

  

3.              Other countries with a DTA with Ireland (* denotes where there is 0% withholding tax in all situations).

  

Albania *

Georgia

Moldova 

Singapore

Armenia

Ghana

Montenegro

South Africa*

Australia

Hong Kong

Morocco

South Korea*

Bahrain*

India

New Zealand

Switzerland*

Belarus

Israel

North Macedonia* 

Thailand

Bosnia & Herzegovina*

Japan

Norway

Turkey

Botswana

Kazakhstan

Pakistan

Ukraine

Canada

Kenya

Panama

United Arab Emirates*

Chile

Kosovo

Qatar*

United Kingdom*

China

Kuwait*

Russian Federation*

United States of America*

Egypt

Malaysia

Saudi Arabia*

Uzbekistan

Ethiopia

Mexico

Serbia

Vietnam

 

 

 

Zambia*

 

 

 

 

 

 

Connecticut Sales and Use Tax

The state of Connecticut imposes a sales and use tax which is applicable to online access to information including all data and access fees.

The tax rate as of 2017 is 1% and is applicable to clients with the state of legal residency of Connecticut or a Connecticut permanent/resident address.

The sales and use tax will be applied to all research and market data subscriptions as well as special connections such as VPN, IB Gateway, Extranet and Dedicated Leased Lines.

The sales and use tax will be passed through to client accounts at the time of the subscription billing. The tax is only applicable if a monthly fee is charged, therefore should an account receive a waiver the sales and use tax will similarly be waived.

 

 

Chicago Personal Property Tax

Chicago has a personal property tax which applies to a non-possessory computer lease by a Chicago resident. The Chicago tax authorities have ruled that tax is to be applied in cases where a customer pays for electronic research/use of an interactive site. The passive receipt or streaming of information is not subject to the tax.

Clients whose permanent residential address or principal business address is Chicago will have this tax passed through to their accounts.

The tax rate, as of October 2017, is 9%. The tax will be charged on the research and news feeds a client is subscribed to. Should a research and news feed be eligible to a waiver based upon commissions generated, the tax will not be applied.

As of October 2017, research and news subscriptions which would be subject to the tax would include

Base IBIS Research Platform and the IBIS Research Essentials Subscription Bundle
Cusip
Dow Jones News Service
Dow Jones Real Time News
US Press Release Feed
Reuters Global Newswire
Reuters StreetEvents Calendars
Reuters Fundamentals
Reuters Basic Newfeed
Morningstar Equity, ETF and Credit Reports
Wall Street Horizons
Zacks Equity Research Reports

The above list is provided on a best efforts basis and is subject to change. Clients will be responsible for any pass through tax regardless of any discrepancy from the list provided above.

 

How to update the US Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) on your account

Background: 

If you have been informed or believe that your account profile contains an incorrect US SSN/ITIN, you may simply log into your Account Management to update this information. Depending on your taxpayer status, you can update your US SSN/ITIN by modifying one of the following documents:

1) IRS Form W9 (if you are a US tax resident and/or US citizen holding a US SSN/ITIN)

2) IRS Form W-8BEN (if you are a Non-US tax resident holding a US SSN/ITIN)

Please note, if your SSN/ITIN has already been verified with the IRS you will be unable to update the information. If however the IRS has not yet verified the ID, you will have the ability to update through Account Management. 

 

How to Modify Your W9/W8

1) To submit this information change request, first login to Account Management

2) Click on the Settings section followed by Account Settings

 

3) Find the Profile(s) section. Locate the User you wish to update and click on the Info button (the "i" icon) to the left of the User's name

 

4) Scroll down to the bottom where you will see the words Tax Forms. Next to it will be a link with the current tax form we have for the account. Click on this tax form to open it

 

5) Review the form. If your US SSN/ITIN is incorrect, click on the UPDATE button at the bottom of the page

 

6) Make the requisite changes and click the CONTINUE button to submit your request.

 

7) If supporting documentation is required to approve your information change request, you will receive a message.  Otherwise, your information change request should be approved within 24-48 hours.

Withholding Tax on Dividend Equivalent Payments - FAQs

Background

Beginning January 1, 2017, new IRS regulations will impose U.S. withholding taxes on US dividend equivalent payments to non-US persons holding derivative positions on US equities. Previously, US withholding tax was not imposed on these payments. The regulations require intermediaries, such as us, to act as withholding agents and collect US tax on behalf of the IRS. An overview of the tax, how it’s determined and the products impacted is provided below.
 
Overview
What is the purpose of the regulation?
The regulation derives from Section 871(m) of the Internal Revenue Code and is intended to harmonize the US tax treatment imposed on non-U.S. persons with respect to dividends on U.S. stock and dividend equivalent payments paid on derivative contracts that replicate (to a high degree) ownership of such stock.
 
An example of this would be a total return swap having IBM as its underlying.  A non-U.S. person holding an IBM stock position would be subject to a 30% US withholding tax (reduced by treaty) on dividend payments. On the other hand prior to the implementation of Section 871(m), a non-U.S. person holding long exposure to IBM on the swap could receive payments equivalent to the dividends without imposition of U.S. withholding tax. This was the case even though the payments replicated similar economic exposure. Section 871(m) now considers those ‘dividend equivalent payments’ subject to US withholding tax.
 
What is a dividend equivalent payment?
A dividend equivalent payment is any gross amount that references the payment of a dividend on a U.S. equity and that is used to compute any net amount transferred to or from the long party, even if the long party make a net payment to the short party or the net payment is zero. Accordingly, such payments would include not only an actual payment in lieu of a dividend but also an estimated dividend payment that is implicitly taken into account in computing one or more of the terms of the transaction, including interest rate, notional amount or purchase price.
 
In the case of a listed call option on a U.S. stock, for example, the holder of the call is not entitled to receive a dividend unless the option is exercised prior to the dividend ex-date. Nonetheless, the premium paid by the holder to purchase the option implicitly takes into account the present value of the expected dividends over the option term.[1] Since this factor serves to lower the payment from the option buyer to the seller, it is viewed as a dividend equivalent payment potentially subject to the rules.
 
Who is subject to the dividend equivalent withholding tax?
The tax applies to qualifying positions held in an account of a non-U.S. taxpayer. It does not apply to U.S. taxpayers. Accounts of non-U.S. taxpayers generally are evidenced by the submission of an IRS Form W-8 and can include the following account types: individual, joint, organization and trust.
 
What derivative instruments potentially are subject to the dividend equivalent withholding tax?
The regulations adopt a two-part test to determine if a derivative instrument is subject to the rules. First, the derivative instruments must reference the dividend on a U.S. equity security. Examples include:
-          equity options
-          regulated single stock futures
-          regulated index futures and options on index futures
-          structured and exchange traded notes
-          CFD contracts
-          convertible bonds
-          securities lending transactions
-          derivatives on custom baskets and
-          warrants
 
If the underlying position is a U.S. equity. The exchange upon which the instrument is traded and the identity of the counterparty do not affect the application of the rules. That is, a derivative can be subject to the rules, whether it is exchange listed or over the counter or trades in the United States or overseas.
 
Second, the derivative instrument must substantially replicate the economics of the underlying U.S. equity at the time of issuance. The rules look to delta (for simple contracts) and a substantially equivalency test (for complex contracts) to make this determination.
 
Delta is a correlation measurement that computes the ratio of the change in the fair market value of the derivative instrument to a change in the fair market value of the U.S. equity referenced by the derivative.  In general, for purposes of this regulation, delta is only determined once over the life of the derivative instrument – at the time it is ‘issued’. It is not recomputed as the fair market value of the underlying security changes or when the derivative instrument is re-sold in the secondary market.
 
For most contracts, the rules are as follows:
·         Pre-2017 – a derivative instrument issued prior to January 1, 2017 (i.e., anything held by a customer with us on December 31, 2016) is not subject to the new withholding tax rules.
·         2017 - a derivative instrument issued in 2017 is potentially subject to the new withholding tax regime if the delta at the time of issuance is 1.0.
·         After 2017 – a derivative instrument issued after December 31, 2017 is potentially subject to the new withholding tax rules if the delta at the time of issuance is 0.8 or greater.
If the derivative is classified as “complex,” the delta test does not apply and instead the substantial equivalency test applies. 
 
So When Is a Derivative Instrument Issued?
Identified when a derivative instrument is issued is very important. It determines if the instrument is subject to the rules (pre-2017 issued instruments are not) and when the delta computation is made. In general, an instrument is ‘issued’ when it comes into existence, its inception date or date of original issuance. Instruments are not issued when re-sold in the secondary market.
 
As a result, there are differences in the issuance rules for listed options, futures, other exchange traded products and over-the-counter products. For example, a listed option traded on a US exchange, generally, is not issued when first listed by an exchange as available for trading. Instead, the listed option is issued (delta determined) when the option is entered into by the customer. On the other hand, for transferable derivatives, such as exchange traded notes, convertible bonds and warrants, they would be issued only when first sold. The delta determined at that time would carryover when sold to a subsequent purchaser. 
 
Are There Any Exceptions?
The rules do provide limited exceptions to withholding. These include:
•        a derivative instrument that references a “qualified index” - generally, a passive broad publicly available index on U.S. equities such as the S&P 500, NASDAQ 100 or Russell 2000.
•        a derivative instrument that references an index with little or no U.S. equity composition – such as the Hang Seng Index.
•        if the dividend equivalent payment (or portion thereof) would not be subject to U.S. withholding tax if the non-US person owned the underlying security directly. This most often will occur for derivative instruments on U.S. mutual funds, REITs and exchange traded funds that pay ‘dividends’ which are re-characterized as capital gain distributions or returns of capital.
 
Can you provide some examples of when the rules will or will not apply?
•        Customer purchases single stock futures on IBM on January 2, 2017. The delta of the future is 1.0. The future is subject to the rule.
•        Customer purchases a deep in the money OCC listed option on IBM on December 28, 2016. The delta of the future is 1.0. The option is not subject to the rule as it was issued prior to 2017.
•        Customer purchases index future on a narrow based index on January 15, 2017. Assume the index is not a ‘qualified index.’ The future is subject to the rule.
•        Customer purchases an exchange trade note that tracks U.S. equities on January 2, 2017 with a delta of 1.0. The note was issued on July 1, 2016. The option is not subject to the rule as it was issued prior to 2017
 
How is the dividend equivalent withholding computed?
If the derivative instrument is subject to the new Section 871(m), a dividend equivalent payment with respect to such instrument equals the per share dividend on the underlying U.S. equity, multiplied by the number of underlying shares referenced by the instrument, multiplied by the delta (e.g., an option contract delivering 100 shares of a stock paying $1.00 dividend and having a delta of .80 would be subject to a tax based upon $80.00 dividend equivalent payment).
 
In the case of a complex derivative contract, the dividend equivalent will be equal to the per share dividend on the underlying, multiplied by the contract’s hedge equivalent to the underlying as calculated when the contract was issued.
 
How are contracts combined for purposes of determining delta?
Starting in 2018, customers who purchase derivative instrument such as a long call having a delta below the .80 threshold and selling a put on the same underlying and same share quantity within 2 days of one another will have those positions combined for the purpose of determining whether the threshold has been exceeded (e.g., the purchase of a long call with a delta of 0.60 coupled with the sale of a put with a delta of .40 would result in a long delta of 1.0).
 
In 2017, only over-the-counter instruments are potentially subject to combination to create a delta 1.0 instrument. 
 
What information do we provide to inform clients about impacted positions?
To minimize exposure to the withholding tax, we intend to provide a TWS warning message will be provided when non-U.S. persons create an order that could generate the tax. This will give customers the option of canceling the order to avoid potential withholding or submitting the order and possibly paying the tax when a dividend occurs. Customers may avoid the potential withholding tax by not owning the derivative on the applicable withholding date (i.e., generally the dividend Record Date).
 
 

IMPORTANT NOTE: We do not provide tax, legal or financial advice. Each customer must speak with the customer’s own advisors to determine the impact that the Section 871(m) rules may have on the customer’s trading activity.


[1] While the holder of the call option does not receive a dividend, the premium paid by the holder for the option implicitly takes expected dividends into account (i.e., because the stock price is expected to drop by the amount of the dividend on the ex-dividend date, cash dividends imply lower call premiums).

Common Reporting Standard (CRS)

The Common Reporting Standard (CRS), referred to as the Standard for Automatic Exchange of Financial Account Information (AEOI), calls on countries to obtain information from their financial institutions and exchange that information with other countries automatically on an annual basis. The CRS sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions. For more information about CRS, please visit the OECD website.

Interactive Brokers entities comply with the requirements of CRS as implemented in the jurisdictions where they are located, and report account information to the applicable government authorities. Clients reported by Interactive Brokers under CRS will receive a CRS Client Report in the Client Portal shortly after the reporting deadlines specified below. The CRS Client Report provides an overview of the information that was reported by Interactive Brokers.

  • What information is reported under CRS:
    • Account number
    • Name
    • Address
    • Tax ID Number
    • Tax residency country
    • Date of birth
    • Year-end account balance
    • Gross proceeds (all sales)
    • Interest income
    • Dividend income
    • Other income
  • When and where is the information reported:
    • Interactive Brokers Australia Pty. Ltd. reports to the Australian Taxation Office (ATO) by July 31.
    • Interactive Brokers Canada Inc. reports to the Canada Revenue Agency (CRA) by May 1.
    • Interactive Brokers Central Europe Zrt. reports to the National Tax and Customs Administration of Hungary (NAV) by June 30.
    • Interactive Brokers Hong Kong Limited reports to the Inland Revenue Department of Hong Kong SAR (IRD) by May 31.
    • Interactive Brokers India Pvt. Ltd. reports to the Reserve Bank of India/Central Board of Direct Taxes (RBI/CBDT) by May 31.
    • Interactive Brokers Ireland Limited reports to the Office of the Revenue Commissioners of Ireland by June 30.
    • Interactive Brokers Securities Japan Inc. reports to the National Tax Agency of Japan (NTA) by April 30.
    • Interactive Brokers Singapore Pte. Ltd. reports to the Inland Revenue Authority of Singapore (IRAS) by May 31.
    • Interactive Brokers U.K. Limited reports to Her Majesty's Revenue and Customs of the United Kingdom (HMRC) by May 31.
  • Additional Notes:
    • Information relating to clients of Introducing Brokers is not reported by Interactive Brokers. Introducing Brokers are responsible for their own reporting under CRS.
    • Accounts held by Interactive Brokers LLC are not reported under CRS as the United States has not signed the CRS.

FATCA Procedures - Grantor Trust Tax Information Submission

Overview: 

Interactive Brokers is required to collect certain documentation from clients to comply with U.S. Foreign Account Tax Compliance Act (“FATCA”) and other international exchange of information agreements.

This guide contains instructions for a Trust to complete the online tax information and to electronically submit a W-9 or W-8BEN.

 

U.S. Tax Classification

Your U.S. income tax classification determines the tax form(s) required to document the account.

You must login to Account Management with the trust's primary username to access the Tax Form Collection page.

1.      Tax Form Collection

The Tax Form Collection page lets account holders review and update important tax-related information and lets account holders electronically fill out an IRS Form W-9 (U.S. taxpayers) and IRS Form W-8 (non-U.S. taxpayers).
 
Accessing the Tax Form Collection Page
 
a. Click Manage Account > Account Information > Tax Information > Tax Forms.
 
b. Click the Update Tax Forms button to access the Collection page.
The Tax Form Collection page opens, displaying a form with tax-related information that should already be completed. (Advisors and brokers can check the status of client updates to this page on the Dashboard Pending Items tab.
 
c.  Review the Trust’s information and update as required.
 
Confirm the primary tax residency of the trust beside the Tax Residency question, "In what country is the trust a resident for tax purposes?"  Select the appropriate country in the drop down menu.
 
 
Select in the Tax Residency drop down menu the applicable country.
 
d. Click Continue.
 

2.      Classification for US Tax Purposes

 
Confirming the Trust’s classification for U.S. purposes
 
a. Review the Trust’s status by confirming the question, “How are you classified for US tax purposes?” The answer is pre-filled based upon your information completed during the account application process. 
 
 
b. Click the Continue button to confirm the trust classification and complete the Form W-8 or W-9 for the entity. 
 
c. Click the Continue button to identify each Grantor. 
 

3.      Identify Grantors

 

a. Click Manage Account > Account Information > Tax Information > Tax Forms.

 
b. Click the Create button beside each grantor to send each user the applicable tax questionnaire and to submit the tax certification form (W-8 or W-9).  
 
Also, update the "Percentage of Ownership" to add up to 100%, if necessary.
 
 
 
 
c. Enter the required fields for the username and password for specified grantor and click the Continue button to complete the email delivery of the link.
 
 
 
We will then send the owner a link to complete the necessary tax form. This link will only be used for the collection of tax forms. You must provide the username and password to the Grantor as link will not contain them.   
 
Each Grantor must login with the username/password created and complete the pending tasks by going to Manage Account > Account Information > Tax Information > Tax Forms  > Update Tax Forms.
 
d. Click the Continue button upon creating and sending usernames to each Grantor.  
 
 
 
 
Disclaimer
This guide does not constitute tax or legal advice and Interactive Brokers cannot advise you on how to complete an IRS Forms W-8 or W-9.  Instructions are for information purposes only and do not address all possible scenarios. Please consult your tax professional if you are unsure how to complete.
 
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