Investment Rating - The report indicates a negative impact on European equities due to Section 899, with an estimated decline of 1-2% in the first year and up to 5% over a four-year horizon [10] Core Insights - Section 899 introduces retaliatory tax measures against non-US individuals and entities from countries imposing "unfair foreign taxes" on US persons, which could discourage foreign investment in US assets [2][8] - The withholding tax for listed companies will start at 5% and increase by 5 percentage points annually to a maximum of 20%, affecting both active business income and passive income [3] - European equities, particularly those with significant US operations, are notably exposed, with the STOXX 600 deriving approximately 25% of its revenues from the US [10] - The report suggests that Section 899 may catalyze renewed interest in European equities as international investors may reduce their appetite for US assets [19] Summary by Sections Tax Mechanics - The withholding tax will apply to both active business income and passive income, starting at 5% and increasing annually [3] Affected Entities - Non-US individuals and entities in countries with UTPRs, DSTs, or DPTs will be affected, including foreign governments, sovereign wealth funds, and foreign corporations [4] Impact on European Equities - Earnings for the STOXX 600 could be revised down by 1-2% in the first year and by as much as 5% over four years, translating to a potential decline in European equities [10] - Companies with high US exposure have begun to reflect growing investor concerns, with a specific subset (GSXES899) particularly vulnerable to Section 899 [13] Investment Strategy - The report recommends focusing on quality domestic exposures in Europe, highlighting sectors such as Banks, Retail, and Telecoms for overweight positions [14]
高盛:第 899 条款与欧洲股市 - 应对风险,释放资金流
Goldman Sachs·2025-06-05 06:42