Taxes on Investments

Hello folks,

Looking for advice - I’m in the process of opening up a TD Ameritrade account online to put some money into stocks / ETFs. I’m a British citizen but currently a Taiwan tax resident. Does anyone know will I be better registering from a UK or a Taiwan address?

If I make money from ETFs / stocks in the USA will the government in the US attempt to tax this money?

Then I guess wherever I move my money to next will attempt to tax my money right? So if I bring it to Taiwan / the UK then that government will want their share?

The US will tax your dividends, but not capital gains. For Taiwan-based investors, withholding tax on dividends is 30%.

Regardless of where your account is registered, you are responsible for reporting your income to any countries in which you are a tax resident. So that would be Taiwan.

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Hmm… definitely not a tax expert here, but…

I’m a US citizen so doesn’t exactly apply to me, but sort of surprised. In theory, I could create an account under my non-US citizen wife’s name to avoid cap gains? Funny thing is that I would probably still prefer to just pay the tax haha

I suppose this is true, but Taiwan has absolutely no power to enforce this. I was a tax resident of Taiwan for many years and never declared my US investment income. Why should I? And how would they be able to find it? I already “overpaid” income tax due to Taiwan’s higher than US tax rate… why would I want to give them more?

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Not an expert on tax law either, but I assume almost no government in the world would accept unwillingness to pay taxes as a valid argument not to pay them :wink:

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Much appreciated thank you, do you know what the capital gains tax is here in Taiwan?

It might be worth a shot though :joy: :joy: :joy:

Taiwan has no capital gains tax on stocks.

That’s not strictly correct.
There is no capital gains tax on local stocks, but overseas stock gains are charged under the AMT (Alternative Minimum Tax) rules: you get a fairly generous tax-free allowance of NT$6.7million pa of overseas income and/or gains, and above this you pay 20% tax.

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I stand corrected.

they will be able to find out if the usa sends your tax data to Taiwan.
the us government demands this information from overseas countries and causes a lot of banks to freak.out and make you fill declarations that you are not a usa citizen
taiwan can ask this information from the usa, whether or not the usa banks will provide this info is another question (now I don’t think they do)

Are you certain about that? The US taxes US citizens on unearned income…ie divs and CG. You are saying it’s not so for foreigners?

whoops…read the thread jd…read the thread…

There is a REALLY big difference between what the US can demand from overseas entities and what the Taiwanese gov can… not that I believe that it is “right”, just the basic fact of life that you need to deal with.

The US basically threatens to withdraw your access to US currencies. And given that much international trade uses the USD, this would pretty much put you out of business. I think most financial entities outside of Taiwan could care less whether they could access the NTD… in fact I’m pretty sure that most don’t have access to it in the first place as it’s a restricted currency which cannot be transferred out of Taiwan.

https://cashmanagement.bnpparibas.com/currency/twd#:~:text=TWD%20–%20New%20Taiwan%20Dollar&text=TWD%20is%20considered%20to%20be,not%20allowed%20outside%20of%20Taiwan.&text=This%20currency%20does%20not%20allow%20decimal%20places.

Most countries don’t even recognize the Taiwan government…

The US government definitely has much more leverage than many other countries, but this type of information exchange can also be part of international conventions dealing with fighting money laundering or specific tax treaties between countries.
if you want to hide taxes, you probably will find a way to do it, it is the “average” person that has an account in their home country and in Taiwan that might get screwed.

I opened a “foreign individual” account with TD Ameritrade.
I’m British living here in sunny Taiwan.
From my understanding as I have this foreign individual account I am not required to pay any US taxes.

Ok so AMT (Alternative Minimum Tax) - no tax on any profits under 6 million NTD and 20% thereafter :slight_smile:

https://www.grantthornton.tw/globalassets/1.-member-firms/taiwan/media/tw_images/publication-pdf/taiwan-tax/2014-4.pdf - if anyone has a better link / source than this please do share.

Ted, am I right in assuming then that any profit on stocks here in Taiwan bought in the USA would not then be taxable in the UK because of the UK / Taiwan tax treaty and the fact that I’m paying taxes here?

UK has a residence-based tax system, so taxes are only due if you are currently a UK resident (it’s not tied to citizenship). Assuming you have officially become non-resident (with confirmation from the UK tax authority), then no UK taxes would be payable.

The double-tax treaty only comes in to play if you have to pay taxes in both places for some reason (e.g. if you’re resident in both jurisdictions at the same time).

If the amounts you are making are significant, then it would be worth getting confirmation from an accountant with experience in cross-border issues.

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Much appreciated! Thank you :slight_smile:

Guys - Ameritrade has requested a bank statement with my proof of address so I went to E Sun bank today and asked if they would provide me with a statement (銀行對賬單). So they told me that they wouldn’t provide a statement with my address on it and that I should consider using a phone bill…

I’ve asked Ameritrade if they’ll accept a photo of my ARC as that contains my address… failing that how else can one prove their address in Taiwan? :sweat_smile: :sweat_smile: :sweat_smile:

Suggest you go to another branch.

I was in the same situation with China Trust. First branch said no can do.
Second branch made an effort to give it to me. Took about 45mins looking at different forms to print on but in the end hey presto.