article

US Corporate Law News: IRS publishes guidance on withholding tax in relation to disposition of partnership interests by non-US persons

15 April 2018 | Applicable law: US

On April 2, 2018, the IRS issued Notice 2018-29, which provides interim guidance on new withholding obligations on persons purchasing partnership interests from non-U.S. persons if the partnership holds assets that are used in a U.S. trade or business. 

The notice reflects that the IRS has decided to leave in place new withholding tax rules for transfers of interests in private partnerships, which require that the withholding agent report and pay any withholding tax within 20 days of transfer. It also reflects that de minimis exemptions are available if the seller certifies to the buyer that (a) less than 25% of the seller's allocable share of partnership income was connected with a U.S. trade or business in the preceding three taxable years or (b) the partnership would recognize less than 25% of the gain in a hypothetical sale transaction of all of its assets connected with a U.S. trade or business. The IRS notice provides interim clarification on withholding obligations as the IRS prepares to issue comprehensive regulations.

For more information, see here.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.

Share

Related experience

As a full-service law firm, we are able to provide advice and information about a wide range of other issues. Here are some related areas.

Join the club

We have lots more news and information that you'll find informative and useful. Let us know what you're interested in and we'll keep you up to date on the issues that matter to you.