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    Profimex’s contribution to decreasing foreign investors tax

    מאת: Jeremy D. Tunis>
    נשלח: Tuesday, 22 December 2015 20:41
    נושא: FIRPTA Reforms Enacted

    We are very happy to report that on December 18, 2015, President Obama signed The
    Protecting Americans from Tax Hikes Act of 2015 (‘The Act”). In addition to
    extending a number of tax relief provisions due to expire at the end of the year, the
    Act incorporates the two main FIRPTA reform provisions that our coalition has
    advocated for over the past several years.
    First, The Act completely exempts “qualified foreign pension funds” and entities
    wholly owned by such funds from FIRPTA taxation, equalizing the tax treatment of
    domestic and foreign pension funds on the disposition of U.S. real property interests.
    A foreign pension fund is “qualified” if it is subject to government regulation and
    certain reporting requirements in its jurisdiction, is established to provide retirement
    or pension benefits to participants or beneficiaries that are current or former
    employees, has no greater than 5% beneficiaries, and enjoys tax benefits on either
    contributions or investment income in its home jurisdiction. The new exemption
    applies to direct investments or investments through partnerships and private equity
    Second, the Act expands the FIRPTA exemption available to small foreign “portfolio
    investors.” Under prior law, foreign investors owning 5% or less of a publicly traded
    REIT were not subject to FIRPTA taxation upon a sale of the REIT’s stock or the
    receipt of a capital gain dividend from the REIT. The Act increases this ownership
    threshold from 5 to 10% bringing the FIRPTA regime in line with the definition of a
    portfolio investor used in most U.S. tax treaties. The Act provides for the first time
    that the exemption for small foreign portfolio investors applies to interests in REITs
    held by certain widely held, publicly traded “qualified collective investment
    vehicles”, including property trusts and foreign publicly traded partnerships that
    qualify under a comprehensive income tax treaty with the United States.
    The passing of these important reforms could not have been possible without your
    tremendous efforts and support. A great thanks also to all members who traveled to
    Washington for Congressional meetings. Our success was also due to your financial
    support allowing the Coalition to highlight the issues through Congressional press
    conferences and political outreach.
    We are also pleased to report that a number of our Congressional supporters
    and key leaders have expressed a desire to continue the effort to make greater
    reforms to FIRPTA through possible tax reform and other avenues next year.
    We will plan to schedule a coalition call the first week of January to discuss these
    matters in more detail but first wanted to thank all coalition members for their
    tremendous efforts over the past couple of years. In the meantime, Happy Holidays to

    Richard & Jeremy

    Jeremy D. Tunis, Esq.
    Vice President, Outreach
    Invest In America Coalition