Section 871(m) is a regulation which subjects US dividends paid to non-US residents to withholding tax, when paid or accrued within non-US derivatives which are closely linked to US equity. Potentially liable to withholding are both principal and intermediaries of such derivatives.
A large French banking group, acting both as a principal and as an intermediary of section 871(m)-liable derivatives, relies on the EasyTax solution for the calculation/withholding part of the 871(m) regulation. As a principal, the banking group has applied for a Qualified Derivatives Dealer (QDD) status. As an intermediary, it remains a secondary withholding agent on third-party derivatives.
Already a user of BearingPoint’s FiTAX solution for the reporting to fiscal authorities (QI, FATCA, AEOI…), the French group, by using EasyTax on the client side, will benefit from a one-stop shop solution:
Thanks to EasyTax’ deep experience in dealing with tax calculation and booking, combined with FiTAX team’s expertise on IRS regulations, we can respond to new regulations very quickly by offering appropriate solutions. On the client side as well as on tax authorities side, banks can benefit from BearingPoint’s already established team network and experience.
Ronald Frey, Partner at BearingPoint
In addition to the regulatory reports produced by FiTAX, EasyTax offers support in monitoring of 871m in-scope securities, reporting, and data extraction features.