In January 2023 the US Internal Revenue Service introduced a 10% withholding tax on the sale proceeds of US Publicly Traded Partnership (PTP) investments. This tax applies to the total amount received from sales of any such investment, regardless of whether you make a gain or loss. This applies to any US Publicly Traded Partnership (PTP) investment available on Hatch which does not currently have an exemption (see below).

If you hold a PTP you may pay 10% withholding tax when you sell any impacted investments. Our broker, DriveWealth, will withhold the 10% at the time of sale and pay the IRS on your behalf.

Some US PTP investments may have an exemption and will not incur the withholding tax at sale. The best way to know if a specific PTP investment is exempt or not is to determine whether the investment provider has issued a statement called a “Qualified Notice”, this indicates that the investment meets the IRS’s requirements for exemption.

If you hold or sell an impacted investment you may be subject to additional tax reporting requirements with the IRS.

In your Hatch tax reports any PTP investment sales made after 31 December 2022 will show the additional US tax as part of the brokerage fee (see the 'Trades Data' file). The IRD has not provided any official guidance as to whether this tax can be claimed as a credit in your NZ return.

We recommend you get advice on your tax reporting obligations if you hold or sell an impacted investment.

Last updated 20/12/22