Withholding Net Will Now Catch More Debt Arrangements

4 Journal of International Taxation 464 (October 1993)

4 Pages Posted: 10 Jul 2015

Date Written: October 1, 1993

Abstract

When the U.S. terminated its income tax treaty with the Netherlands Antilles in 1984, there was criticism from U.S. corporations that they were being unfairly kept out of the competitive Eurobond financing market. In order to provide access to the Eurobond market, Congress enacted Section 871(h) to provide an exemption (the “portfolio interest exemption”) from the 30% withholding tax on U.S.-source income earned by a nonresident alien individual or foreign corporation that is not effectively connected with the conduct of a U.S. trade or business. Portfolio interest, under Sections 871(h) and 163(f), is any U.S.-source interest (including original issue discount) that is not effectively connected with the conduct of a trade or business and (1) is paid on an obligation that satisfies certain registration requirements or specified exceptions contained in Section 163(f), or for which the U.S. payor (or U.S. person whose duty it would otherwise be to withhold tax) obtains a statement that the beneficial owner is not a U.S. person, and (2) which is not received by a 10% owner or issuer of the obligation taking into account shares owned by attribution.

Suggested Citation

Appel, Alan, Withholding Net Will Now Catch More Debt Arrangements (October 1, 1993). 4 Journal of International Taxation 464 (October 1993), Available at SSRN: https://ssrn.com/abstract=2628166

Alan Appel (Contact Author)

New York Law School ( email )

185 West Broadway
New York, NY 10013
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
10
Abstract Views
469
PlumX Metrics