President Obama recently signed into law the Protecting Americans from Tax Hikes Act of 2015 (the “Act”), which extends permanently certain tax provisions concerning regulated investment companies (RICs) that were scheduled to expire at the end of 2014.

Non-U.S. individuals and corporations are generally exempt from the 30% withholding tax (which tax is generally imposed on dividends paid by U.S. corporations) on dividends received from a RIC, to the extent such dividends are interest-related dividends or short-term capital gain dividends. These exemption provisions were enacted as part of the American Jobs Creation Act of 2004 and were scheduled to expire on December 31, 2014 prior to the enactment of the Act.

The Act permanently extends these provisions. Accordingly, as a result of this extension, interest-related dividends and short-term dividends received from RICs in 2015 or a subsequent taxable year will continue to not be subject to the 30% withholding tax in the hands of non-U.S. individual or corporate shareholders of RICs.

In addition, Distributions from RICs that are designated as made out of long-term capital gains will also continue to be exempt from the 30% withholding tax in the hands of foreign shareholders of RICs.

If you have any questions regarding the issues discussed herein, please contact Jonathan P. Brose (212-574-1615), Ronald P. Cima (212-574-1471), James C. Cofer (212-574-1688), Daniel C. Murphy (212-574-1210) or Peter E. Pront (212-574-1221).