To minimize exposure to the withholding tax, we will provide a TWS warning message when non-U.S. person creates an order that could generate the tax. This will give customers the option of canceling the order to avoid potential withholding or submitting the order and possibly paying the tax when a dividend occurs. Customers may avoid the potential withholding tax by not owning the derivative on the applicable withholding date (i.e., generally the dividend Record Date).
Please Note
- We do not provide tax, legal or financial advice. Each customer must speak with the customer’s own advisors to determine the impact that the Section 871(m) rules may have on the customer’s trading activity.