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Legal Update

Holiday Party: The IRS Releases Final Regulations on Cross-Border Dividend Equivalents Paid on Swaps and in Security Lending Transactions

9 December 2013
Mayer Brown Legal Update
On December 4, 2013, final regulations were issued under Section 871(m) of the Internal Revenue Code for dividend equivalents paid to non-US persons prior to 2016, and regulations were proposed for dividend equivalents paid after such date. Among other things, the regulations provide that the four categories of statute-specified swaps that can give rise to dividend equivalents remain the sole types of equity derivative transactions (apart from securities loans) that can give rise to US-source dividend equivalents. The proposed regulations for post-2016 dividend equivalents provide for a new regime under which withholding is proposed to be required.


  • Mark H. Leeds
    T +1 212 506 2499
  • Jonathan A. Sambur
    T +1 202 263 3256
  • Jared B. Goldberger
    T +1 212 506 2421
  • James R. Barry
    T +1 312 701 7169
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