Publication date: 26 August 2016
Dear Mr Stack,
Dear Mr Sweeney,
I am writing to you as Chief Executive of the European Banking Federation (EBF) which is the voice of the European banking sector and uniting 32 national banking associations in Europe that together represent some 4,500 banks – large and small, wholesale and retail, local and international – employing about 2.5 million people.
The present letter expresses our views and concerns about several aspects of regulations issued by the U.S. Department of the Treasury and the U.S. Internal Revenue Service on 17 September 2015 under Section 871(m) of the U.S. Internal Revenue Code1 as well as related provisions set out in IRS Notice 2016-42 pertaining to the Proposed Qualify Intermediary Agreement (these regulations and provisions are hereinafter collectively referred to as the “Regulations”). The present letter notably elaborates on certain open issues regarding the treatment of dividend equivalent payments under applicable income tax treaties and related legal issues that may arise from the perspective of non-U.S. withholding agents under their respective domestic legislation. This letter also offers some high-level comments with respect to the timeframe currently contemplated for the implementation of the Regulations and the flow of information required for the correct application of the related withholding tax by withholding agents along with suggested ways to accommodate the resulting challenges in a more effective way while still meeting the policy objectives of the Regulations. Additional technical comments related to IRS Notice 2016-42 will be submitted in a separate letter. These shall not detract from the representations made in the present letter.
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