Tax Law Updates | New Proposed Legislation
July 29, 2010
New Substitute Amendment to Small Business Jobs Act Subjects Guarantee Fees to Withholding Tax
Small Business Jobs Act
H.R. 5297, 7/21/2010
The Senate Finance Committee, through its Chairman Max Baucus, D-Mont. has released its report on the Committee’s proposed substitute amendment(“Substitute”) to the Small Business Jobs Act.
Based on this report, the Substitute has the following salient provisions:
Source Rules on Guarantees. Under current law, the treatment of guarantee fees under the source rules is unclear. If guarantee fees are sourced like services, they are sourced according to the location in which the services were performed. If the guarantee fees are sourced like interest, they are sourced by reference to the country of residence of the payor. The report cited a recent…
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View a PDF of the proposed legislation
