The IRS on 19 January 2017 issued final and temporary regulations (TD 9815).  The final and temporary regulations provides guidance to nonresident alien individuals and foreign corporations that hold certain financial products providing for payments that are contingent upon or determined by reference to U.S. source dividend payments.

The regulations also provide guidance to withholding agents that are responsible for withholding U.S. tax with respect to a dividend equivalent, as well as certain other parties to section 871(m) transactions and their agents.

 The final and temporary regulations are effective on January 19, 2017.