I know that non-US residents should invest in UCITS etfs.
Im just curious on how are the 30% taxes deducted for a non-US investor when a 1) US listed distributing etf issues dividends and 2) when a US listed accumulating etf issues dividends.
what about capital gains tax? what is the tax rate for non-US residents? how will this capital gains tax be deducted?
my guess is ur broker account will receive the dividends/proceeds from sale net of taxes. which means non-US investors do not need to worry about paying the taxes themselves. am i right?
how are the 30% taxes deducted for a US domiciled ETF for a non-US resident?
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Re: how are the 30% taxes deducted for a US domiciled ETF for a non-US resident?
The answers are all in this wiki page: Nonresident alien taxation - Bogleheads
In summary:
In summary:
- The broker withholds the 30% (or lower treaty rate, if applicable) on dividends paid by US stocks and US domiciled ETFs (your case 1)
- US tax law does not permit the formation of US domiciled accumulating ETFs, so the question of these does not arise (your case 2)
- The US does not tax capital gains of most US assets held by nonresident aliens (except for real estate; here special rules apply)
Re: how are the 30% taxes deducted for a US domiciled ETF for a non-US resident?
This 30% is on top of the L1WT of all the non-USA domiciled corporations in the ETF.
If I were forced to use a USA domiciled equity ETF again I would buy and hold VTI (100% USA) and not VT (60% USA).
If I were forced to use a USA domiciled equity ETF again I would buy and hold VTI (100% USA) and not VT (60% USA).
KISS & STC.