Withholding Tax on Publicly Traded Partnerships ("PTP") Securities

The US Internal Revenue Service (“IRS”) has issued a new provision under Section 1446(a) and Section 1446(f) of the Internal Revenue Code (“IRC”) that primarily impacts Non-US Persons who invest in PTP Securities.

With effect from 1 January 2023, the following withholding taxes will be applied:

• 10% of the amount realized on that sale or exchange
• Up to 37% on other connected taxable income (e.g. gross dividends paid out)

In view of the above,

• Clients who hold PTP Securities may want to sell these securities by 28 Dec 2022 to avoid the additional withholding taxes.
• Clients may want to hold off purchasing new PTP securities till the implementation of the new provision is clearer.
• UOB Kay Hian ("UOBKH") will not accept transfer in of PTP Securities request from clients till further notice.
• With immediate effect, PTP Securities should only be traded through our online channel. If PTP Securities are being traded through our offline channel, such transactions may be squared off in the market without notice by our counter-parties and the related costs, loss, commission, tax or any other charges and expenses incurred will be booked to clients.

Hereunder please find the non-exhaustive list of PTP Securities for your reference. It may be subject to changes from time to time without prior notice and UOBKH does not warrant the accuracy, reliability, and completeness of the list.

Please click here for the PTP Securities list.

If you are holding any PTP Securities, we suggest you to consult your tax advisor, review your investment portfolio and take appropriate actions as soon as possible. Also, UOBKH reserves the right to claim the withholding tax from the customer to satisfy IRS withholding requirement.

For details, please refer to the following information:

IRS Requirements on PTP Products: https://www.irs.gov/individuals/international-taxpayers/publicly-traded-partnerships
IRS Regulations on the Withholding Tax on PTP Transactions: https://www.irs.gov/individuals/international-taxpayers/partnership-withholding

Please contact your account executive or our client services hotline +852 2136 1818 if you have any further inquiries.