U.S.A.: Proposed Regulations on tax treatment of deemed distributions under Section 305(c) of stock and rights to acquire stock

On 13 April 2016, the U.S. Treasury and Internal Revenue Service (IRS) issued proposed regulations (REG-133673-15) regarding deemed distributions of stock and rights to acquire stock.

The proposed regulations would resolve ambiguities concerning the amount and timing of deemed distributions that are or result from adjustments to rights to acquire stock. The proposed regulations would also provide additional guidance to withholding agents regarding their current withholding and information reporting obligations under Chapter 3 and Chapter 4 with respect to these deemed distributions.

The proposed regulations would affect corporations issuing rights to acquire stock, their shareholders and holders of these rights, and the withholding agents with respect to these deemed distributions.

Clearstream Banking¹ is currently reviewing these proposed regulations and will share any further relevant information with customers as it becomes available.

Further information

For further information, please contact the Clearstream Banking Tax Help Desk or Clearstream Banking Client Services or your Relationship Officer.

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1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500, and Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248.