Tax Bytes: Week of October 12, 2026

Tax developments

IRS again extends Section 871(m) transition relief for dividend equivalent payment rules through 2028

The IRS has extended key transition relief under the Section 871(m) regulations through 2028. Notice 2026-61 generally continues the relief provided under prior guidance for tax years 2027 and 2028, while adding two clarifications affecting qualified derivatives dealers (QDDs) and the qualified securities lender transition rules.

Under the Notice, QDD relief for dividends and dividend equivalents received in an equity derivatives dealer capacity is expressly conditioned on properly identifying those dividends on the QDD’s withholding statement. The IRS also clarified that the extended qualified securities lender relief applies only to Parts III.C, III.D and III.E of Notice 2010-46. Otherwise, the relief continues without substantive change.

Read our full alert here.

Substance, not style: New OECD Model Convention

The Organisation for Economic Co-operation and Development has released a new edition of its Model Tax Convention on Income and on Capital, incorporating the treaty changes approved in its 2025 Updates. The revisions address several significant international tax issues, including when an employee working across borders from a home or similar location may create a permanent establishment for an employer, the interaction between the arm’s length principle and domestic interest-deduction limitations, transfer pricing disputes involving Amount B, and the exchange and use of tax information.

The new edition does not introduce substantive changes beyond those approved in 2025. Instead, it brings the updated treaty articles, commentary and related guidance together in the complete OECD Model.

Read our full alert here.

Recent Eversheds Sutherland Tax insights 

From our International Partners:

Germany / Tax - The One Pager: Market Development/Penetration Grant for Distressed Entities

Germany / Tax - The One Pager: guidelines on documentation of outbound loans