eToro is now rolling out a new update on its PTP: to no longer support underlying assets for non-US users since January 1st, 2023.
Online broker eToro announced its publicly traded partnership (PTP) update. The company will no longer support trading in Publicly Traded Partnership (PTP) underlying assets for non-US users. This was done in response to the IRS' new Internal Revenue Code Section 1446(f) that went into effect on January 1, 2023. This change impacts proceeds from the sale of PTPs owned by non-US taxpayers.
All sales are subject to a 10% withholding tax, so if you close a $10,000 position, even if no profit is made, there will be $1,000 withholding tax. As a result, you will receive $9,000.
Due to the tax obligation to hold and maintain these assets, eToro will no longer be offering 'real' positions in PTP. The world's largest social trading community has asked clients to close all open 'real' positions in PTP before the market closes on December 26, 2022. For clients who have not closed their position, eToro liquidated the remaining (relevant) holdings on December 28, 2022 yesterday.
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Existing positions have been moved to Close Only, meaning you cannot open new 'BUY' positions on the underlying asset but can close existing positions. Fortunately, clients wishing to gain exposure to PTP can still open CFD positions if they wish.