I wonder: does anyone invest in the U.S. markets?
How do you deal with withholding taxes on dividends?
I’m new to this, since I just bought some dividend bearing stocks and the withholding rate is 30%.
Do I need to file taxes?
Kenneth
You brokerage withholds? What brokerage? Most of my stock investing is through my retirement account, but even with my regular brokerage account, I don’t recall any sort of withholding. You mean you’d get a 1099 at the end of the year with 30% withheld on dividends? Seems totally strange to me. Of course, I don’t have a whole lot in my regular brokerage account, so maybe I’m under the radar screen.
Of course the easy solution would be to just do your US investing through your IRA account.
This is the rub:
I’m a non-resident non-US citizen. I think there are others in the same boat, so IRA rules don’t apply.
Hence my broker claims I have to pay 30% withholding tax.
I don’t know if there’s anyway I can get that back. Can I file?
Anyone else in the same boat/ship/dinghy/plank of wood?
Kenneth
The old way was fill in a W8 and never pay anything but they have a new form now W8BEN.
irs.gov/pub/irs-pdf/fw8ben.pdf
Have a look at it - the exemption from all taxes probably is still in force if you send that one in. If not then absolutely no foreigners would invest in the US cept for those wacky Mainlanders and the Japs who can’t seem to get enough of those depreciating US$ bonds.
[quote=“gazza”]W8BEN.
Have a look at it - the exemption from all taxes probably is still in force if you send that one in. If not then absolutely no foreigners would invest in the US cept for those wacky Mainlanders and the Japs who can’t seem to get enough of those depreciating US$ bonds.[/quote]
I sent it in, but no luck. The withholding is still 30%. Can’t figure out why.
They did point me to another publication (p515) which seemed to indicate that withholding exemptions only applied to those country with taxation treaties with the US. Taiwan doesn’t have one.
So… any further thoughts.
Kenneth