I've got a confusing case so I'm looking for advice. Before I moved to Australia (as an Irish tax resident) I had investments in Irish domiciled distributing ETFs e.g. VUSA, IQQA etc.
My understanding is after the purchase in Ireland tax can be declared after 8yrs on the total dividends received.
Also, my broker (degiro) does not automatically deduct tax the tax withheld like it does US stocks. Even worse they provide no statements showing what tax was withheld by the fund
Now that I'm here in Australia I'm not sure how to proceed. I know Australia has a tax treaty with Ireland. So will the Irish 8yrs disposal tax rule suffice? Or do I need to declare every year I'm in Australia?
And if it's the latter how do I figure out what tax was withheld?
Thanks!
Irish domiciled ETF taxation as an Australian resident
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Re: Irish domiciled ETF taxation as an Australian resident
Welcome.
With that in mind, many (most?) countries only allow investors a credit for direct tax withholding on dividends; that is, something withheld by the broker. A few allow investors to take credits for fund-level tax. The US is one; I don't know about Australia (not an Australian investor, sorry). If it's not provided to you, if you dig around in an ETF's annual report you should be able to come up with a number that represents your share of the foreign tax paid by that ETF. Just beware that if Australia only allows credits for direct taxes paid, this might not be useful information.
If you haven't already found it, there is some information in the wiki about how these direct/indirect ETF taxes work:
- Nonresident alien taxation - Bogleheads
- Nonresident alien investors and Ireland domiciled ETFs - Bogleheads
Unlike US domiciled ETFs and US stocks, Ireland domiciled ETFs require no broker withholding. Ireland does not tax dividends paid by Irish domiciled ETFs to non-Irish residents. To the extent that there is any tax withholding, it will have been handled internally by the fund.
With that in mind, many (most?) countries only allow investors a credit for direct tax withholding on dividends; that is, something withheld by the broker. A few allow investors to take credits for fund-level tax. The US is one; I don't know about Australia (not an Australian investor, sorry). If it's not provided to you, if you dig around in an ETF's annual report you should be able to come up with a number that represents your share of the foreign tax paid by that ETF. Just beware that if Australia only allows credits for direct taxes paid, this might not be useful information.
If you haven't already found it, there is some information in the wiki about how these direct/indirect ETF taxes work:
- Nonresident alien taxation - Bogleheads
- Nonresident alien investors and Ireland domiciled ETFs - Bogleheads
That part looks complex, and it may be that nobody here has any clue how to resolve it. I certainly do not, I'm afraid.
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Re: Irish domiciled ETF taxation as an Australian resident
OP will need to find an Australian accountant that has specific experience, not only with expats but experience with Ireland-based investments.TedSwippet wrote: ↑Tue Aug 03, 2021 5:54 amThat part looks complex, and it may be that nobody here has any clue how to resolve it. I certainly do not, I'm afraid.
OP can drop me a PM and I can try give a couple that work with expats, but no idea if they will know Ireland investment specific info. Maybe if they don't, they will have some idea of someone they can refer to.