All Non US Persons are subject to US tax at a rate of 30% on income they receive from US sources, such as dividends on US
securities. If you reside in a country that has a double taxation treaty agreement with the US, you can avail of a reduced rate
of tax deducted, generally 15%. This US tax is also charged on sales of US securities for Non US Persons at a rate of 30%. For
a person residing in a country, that has a double taxation treaty agreement with the US, the rate of tax is reduced to 0%.
Ireland, the United Kingdom and most other EU countries are among the countries that have a double taxation treaty with the
US. (Full list available from www.irs.gov)
To avail of this reduced rate of tax, we must ask clients to complete a US tax form (W-8BEN), also known as a 'Certificate of
Foreign Status of Beneficial Owner for United States Tax Withholding'. The purpose of the form is to “certify” the country you
live in and to confirm you are not resident in the United States.
As far as I know you can get a tax credit for any US dividend witholding tax under the Ireland/US double taxation agreement. If you have remitted a W-8BEN form to the US authorities (normally via your US broker) then I believe that the witholding tax is reduced to 0% so you just have to pay the Irish tax in full. From the W-8BEN form:
Sounds like it.Hi lads,
I have just gotten a statement in the door from my broker detailing the net dividend payable to me arising out of a share scheme I am in with my company. I have had US tax deducted at 15%. Does this mean that I have not filled out an up to date W8-ben?
Not sure if it's every year but they definitely have to be renewed. In my experience your broker usually notifies you - e.g. Datek/Ameritrade in the past and E*Trade now in my case.I know I have filled it out in the past. Does it need to be updated every year?
Yes - but I'm not sure where the 15% US witholding tax and (?) 20% Irish witholding tax comes into your situation?Irish tax has been deducted @20%. However as I pay at the top rate, does this mean that I must pay the balance of tax up to 41% to the revenue.
Depends on the double taxation treaty - this may allow you to claim a credit against Irish liabilities in respect of the US witholding tax.Is there any way I can claim back the US tax?
Form 12 I presume?What form do I need to fill out to settle with the revenue?
See the CGT section of www.revenue.ie - it explains how to make a CGT return. You should probably make one even if there is no CGT liability if only to record the relevant figures.As a sepearate question. I sold company shares this year. There is not CGT payable on them as I made an overall loss. Do I need to do a return to the revenu on this. What form do I fill out if any?
See the CGT section of www.revenue.ie.At what point are you required to make a a tax return on shares that have been sold?
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