Dividend Tax on Irish ETF's for Non-residents

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Topic Author
Bkkkiwi
Posts: 4
Joined: Fri Jun 13, 2014 4:37 am

Dividend Tax on Irish ETF's for Non-residents

Post by Bkkkiwi »

I am a New Zealander teaching in Thailand, and a resident of Thailand (only) for tax purposes.

Last year I began to purchase the Irish-domicled VWRD (a distributing ETF) on the LSE through Swissquote Bank Europe (formerly Internaxx - based in Luxembourg).

I have some questions regarding dividend tax, extra documentation, and possible tax return filing.

Dividend Tax

From looking at my March 2021 dividend statement for VWRD, there was no withholding tax at all (in fact no withholding tax on any of the 3 quarterly statements I have so far received).

There was a March distribution of $0.33801 which is the same rate seen on Vanguard's UK website. Also at the top of that same page is a note that states: Tax Treatment = Gross.

Is it correct for my statement to have no tax removed ?

Is this because the Level 1 Tax has already been taken out ? (If so, why does Vanguard report ‘Gross’ instead of ‘Net’ on their site ?)

From reading this 2017 threadviewtopic.php?t=231803(thanks Ted Swippet) it seems that I do not have to worry at all, and that no further action needs be taken, however the 0% withholding tax on my statement still worries me a little.

Extra Documentation

From a google of the Irish Tax department =https://www.revenue.ie/en/companies-an ... dents.aspx, it seems that non-resident investors in Irish Domiciled ETF’s are able to get an exemption from paying dividend tax, however it is not automatic, and needs some extra documentation (it seems you need to provide proof of your tax residency in another country - and the proof to be supplied by the Thai Tax Department).

The proof of residency then needs to be sent to either:

* the Irish company OR Authorised Withholding Agent (AWA)
* the qualifying Intermediary (QI)

The Irish Tax Department has a list of Authorised Withholding Agents, however neither Vanguard or Swissquote are on this.

Do I actually need to apply for this exemption, or has it already been granted to Swissquote and/ or Vanguard ? (a company, but acting as a ‘nonresident’).

When I first joined Swissquote, I provided my Thai address, Thai tax number, as well as proof of being an employee at school. Nothing else was requested at the time of joining.

Possible Tax Returns

According to previous threads on this forum, it seems that tax returns are not required for non-resident investors in Irish ETF’s. Is this still the case ?

Hoping for some clarification from the Wise heads on this forum.

many thanks!
TedSwippet
Posts: 5166
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Dividend Tax on Irish ETF's for Non-residents

Post by TedSwippet »

Bkkkiwi wrote: Thu Apr 15, 2021 4:27 am Is it correct for my statement to have no tax removed ? Is this because the Level 1 Tax has already been taken out ?
Yes, and yes.
Bkkkiwi wrote: Thu Apr 15, 2021 4:27 am From reading this 2017 threadviewtopic.php?t=231803(thanks Ted Swippet) it seems that I do not have to worry at all, and that no further action needs be taken, however the 0% withholding tax on my statement still worries me a little.
Nothing to worry about. All your non-local tax is already paid. All you need worry about now is whether or not Thailand will want a piece of these ETF dividends.
Bkkkiwi wrote: Thu Apr 15, 2021 4:27 am From a google of the Irish Tax department, it seems that non-resident investors in Irish Domiciled ETF’s are able to get an exemption from paying dividend tax, ...

Do I actually need to apply for this exemption, or has it already been granted to Swissquote and/ or Vanguard ? (a company, but acting as a ‘nonresident’).
There ought to be nothing for you to do here. If it does need handling, your broker should handle any or all of this internally, based on the residence country details you gave them.
Bkkkiwi wrote: Thu Apr 15, 2021 4:27 am According to previous threads on this forum, it seems that tax returns are not required for non-resident investors in Irish ETF’s. Is this still the case ?
It is. (Imagine how swamped the Irish tax authorities would be if everybody who owned shares in an Ireland domiciled ETF filed annual Irish non-resident tax returns!)

In summary then, the only thing you now have to concern yourself with is any tax liability to your residence country. Everything else is taken care of.
Topic Author
Bkkkiwi
Posts: 4
Joined: Fri Jun 13, 2014 4:37 am

Re: Dividend Tax on Irish ETF's for Non-residents

Post by Bkkkiwi »

Thanks TedSwippet for such a prompt and helpful response.
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