I'm considering to open an account at IB. Only one final question remains: what is the withholding tax situation? I want to avoid to pay tax on dividends twice.
I'm a Belgian citizen, living in Switzerland (Vaud).
I have contacted IB for this, and got the following response:
What does this really mean?
* IB will always provide tax information to CH, so better make sure that my tax sheets are filed correctly?
* IB will not withhold any taxes on dividends, except for US corporations. I will need to pay tax on them in CH?
* dividends of US corporations will be tax withheld by IB, do I need to pay yet again tax in CH then? Does the US and CH have a tax treaty?
My current situation with my broker in Belgium is that I am not taxed at all on any dividends. It's up to me to declare the income of dividends in CH.
I'm a Belgian citizen, living in Switzerland (Vaud).
I have contacted IB for this, and got the following response:
Quote:
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Information relating to tax obligations is reported as required to the tax authorities within your country of residence as well as other countries if trading products subject to any local withholding requirements. Unless specifically directed by a taxing authority, IB does not withhold taxes on proceeds from security sales. We are required by US tax law, for example, to withhold US taxes on dividends paid by US corporations to foreign persons at a rate of 30%. This rate may be lower if the US has entered into a tax treaty with your country. In addition, investment interest income is not subject to US withholding. Currently for Switzerland, this treaty rate is 30% for ordinary dividend income issued from US Corporations. All withholdings for non-US persons and most entities will be reported on Form 1042-S at the close of each year. For further information refer to IRS publication 901 and/or your tax advisor. |
* IB will always provide tax information to CH, so better make sure that my tax sheets are filed correctly?
* IB will not withhold any taxes on dividends, except for US corporations. I will need to pay tax on them in CH?
* dividends of US corporations will be tax withheld by IB, do I need to pay yet again tax in CH then? Does the US and CH have a tax treaty?
My current situation with my broker in Belgium is that I am not taxed at all on any dividends. It's up to me to declare the income of dividends in CH.