Key Post tax on dividends from US shares

L

lledlledlled

Registered User
Messages
419
i'm thinking of buying shares in a NYSE quoted company. i noticed on the td waterhouse website that to do this i need to fill out a W8BEN form. i have tried looking for what this is for but am confused; does it mean i'm liable for 30% tax on dividends from these shares or does it mean i'm exempt from this tax?
also, i've read elsewhere on AAM that buying LSE quoted stocks has, in effect, a double taxation burden. is this also the case for any other markets?

thanks for any replies
 
You pay double tax on UK, Canadian dividend.
For US dividend you get credit when you pay tax in Ireland.
And you need to fill out a W8BEN form if you going to trade US securities.
 
lledlledlled said:
i'm thinking of buying shares in a NYSE quoted company. i noticed on the td waterhouse website that to do this i need to fill out a W8BEN form. i have tried looking for what this is for but am confused; does it mean i'm liable for 30% tax on dividends from these shares or does it mean i'm exempt from this tax?
also, i've read elsewhere on AAM that buying LSE quoted stocks has, in effect, a double taxation burden. is this also the case for any other markets?
thanks for any replies
Click to expand...

I believe that when you fill in the W8BEN form you pay a reduced rate of tax of 15%, rather than 30%.

strmin said:
You pay double tax on UK, Canadian dividend.
Click to expand...

Are you sure about that? According to Revenue there are double taxation treaties with UK since the 70s and with Canada since 2006. These treaties include income tax, which dividends are subject to.

See here:
http://www.revenue.ie/en/practitioner/law/commentary_irishtaxtreaties.pdf
 
When you fill in a W8 BEN you dont pay any US tax, as the form is stating that you are not a US citizen, don't live there, don't work there, blah blah blah..

You pay all taxes in Ireland, including tax on dividends..
 
thanks for the replies. so in a nutshell we pay the same % tax on dividends from NYSE as ISEQ shares, and double on Toronto and LSE. seems like i'd be mad to buy on the latter two exchanges.
 
lledlledlled said:
thanks for the replies. so in a nutshell we pay the same % tax on dividends from NYSE as ISEQ shares, and double on Toronto and LSE. seems like i'd be mad to buy on the latter two exchanges.
Click to expand...

No, there is a double taxation treaty with the UK and Canada, so you offset any taxes paid in those countries against those that are due here.
 
Whats a good source (book or other) source of Tax info. relevant to the Irish investor investing in national and international markets?
 
Chris said:
No, there is a double taxation treaty with the UK and Canada, so you offset any taxes paid in those countries against those that are due here.
Click to expand...

I don't have the details to hand but this topic has come up before, and as always while open to correction, it seems that for UK dividends there is a form of double taxation in that the Irish tax is deducted from the net proceeds of the UK dividend. A double taxation agreement does not necessarily mean reduced tax, only that there is an agreement on how things are done...
[broken link removed] This is pretty clear

For US dividends I have been pretty sure you do get a credit for the 15% withholding tax, but I cannot find any definitive documents on this. On my tax return I state as asked the gross amount, and I seem to get a credit.

Well... glancing casually on the Revenue tax treaties I get the impression that there is a US tax credit, though it's unclear... [broken link removed] Any lawyers on board?


Ix.
 
Sorry for bumping an old thread, but it's still relevant.
Where, specifically, do you send the W8BEN form?

  • Do you send it to your broker (like Saxo)?
  • Do you send it to a US email address?
  • Can I preemptively send this form to the US government before buying any stocks, or do I have to do it retrospectively?
 
Hi he-man,

You send the W8-BEN to your broker or administrator you buy the shares through.
Contrary to previous posts here there should be no withholding tax withheld from your dividend when you provide this form.
You don't need to provide it to the U.S. Government, just to whoever you buy the shares from and pays you the div.
They might accept it by e-mail initially, but they will need the original to follow, and they may need a copy of your passport etc but they will probably already have that for anti money laundering docs.
 
Thanks, H.

I am opening my brokerage account with Saxo in the middle east and I see that there's no double taxation treaty with the US. So, I'm not sure whether I should still complete the form as the local Saxo people don't seem to know much about it.
 

The big question I would ask them is will they pay you Gross dividends and redemptions (assuming a capital gain) or will they have to withhold any tax, without a taxation treaty I would imagine they’re not going to withhold

if they say they pay Gross then happy days but bear in mind they, or someone, might come looking for the W8BEN form at some point in the future – the U.S. government is constantly adding to the requirements and the scope around this issue

or if they say they pay Net well then ask what is withheld and why, if its U.S. Tax then it shouldn’t be withheld if you provide a W8BEN (you say they don’t seem to know much about it so I would imagine they’re not withholding but definitely get that confirmation from them)

From your point of view the most important things are that you receive gross dividends and redemption proceeds if you are entitled to, and that any point in the future the U.S. govt want confirmation from you that you are in a position to provide that, i.e. that you are not a U.S. person, and finally that you of course file the relevant tax return for these dividends in your relevant jurisdiction.
 
It's really not easy to answer your question as it depends on what you trade and where you live.
From your post I understand that you use a stock broker to trade shares.
 
Anyone who has traded US shares care to update this ..... Thanks

Just phoned TD Waterhouse and they said the dividend with holding tax is generally 20% (But not always.
They also said it would be higher if it wasn't for the W8BEN form. However they said you could not hold US securities without it anyway.
So the question still remains can you claim the 20% back as a credit from Irish revenue?
 
Last edited:
You must log in or register to reply here.
Back
Top