Withholding Tax Rates by Country for Foreign Stock Dividends

Hi David, nice post and a lot of information. But do you have any info on taxes applied by US to foreign investors? I am a resident of Spain (not a Spanish citizen) and I’d like to invest in US stock market. And of course, I’d like to know how my income (dividends and income from selling the shares) is going to be taxed. Do you have any clue about this?
Thanks

David,
Thank you for this information. I have been thinking about investing in stocks outside the US; but, needed this info before proceeding. You answered all my questions and more. I have saved this site in my Favorites.
Susan

Can you publish or send me a list of foreign companies in the countries that don’t withhold taxes who pay dividends? (Like NGG which you mentioned in your article.)

Thanks

[...] this year I wrote a post on withholding taxes for foreign stock dividends based on data from Dow Jones Indexes. In this [...]

[...] dividend payments made by foreign firms can be volatile and vary based on earnings.However due to taxation laws and policies, foreign companies generally tend to have higher payout ratios than U.S. firms. So [...]

Thank you for your informative website. Please clarify the following: We are US residents and receive UK dividends, what is the withholding requirement? It seems according to your withholding Tax Rates sch the tax rate is 0, due to tax treaty, however, in other places that I have researched, it seems that the withholding rate is 15%?

Also, is there a form that we must file to prevent them from withholding? or if we have to withhold, is there a form that we must file to claim our money back?

Thank you very much for your help.

I’f confused. I’m looking at a Brazilian stock for my IRA. When I click on Withholding Tax Rates by Country document in pdf, it shows a zero tax rate for Brazil. But the table above in the main article shows a 15% withholding rate. Which one is correct?

Could you please tell me where you found
4. Canada charges a 15% tax on dividends held in non-taxable accounts. But due to a policy change in 2009, dividends and interest income are exempt from this 15% tax if the investments are held in IRA or 401(K) accounts. So U.S. investors can hold Canadian banks such as bank of Novo Scotia (BNS), Royal Bank of Canada(RY) or other dividend-paying stocks like Enbridge (ENB) in their IRAs for the long-term without worrying about taxes on dividends.
I read Publication 597 IRS, and failed to get this info from there.

Thanks.

Sorry to regress to an earlier point (on Brazilian holdings) but I am speaking to an investment firm in Brazil whose clients are largely from abroad and according to them, as well as according to Deloitte and other sources I have seen via internet, Brazil does not withhold any tax for foreigners enjoying dividend income issued by a Brazilian firm. However, I see that in the case of US citizens, evidently 15% is applied. Could this be a special case only for US based foreigners? I know the tax treaty issue between the US and Brazil is still pending resolution but if the Brazilian government withholds, what becomes of that money? Does it stay in Brazil and due to lack of a tax treaty force the US citizen to pay dividend tax again in the US?

Thanks for any insight on the matter.

Paul,
Great Site but I continue to be confused re the amount of the withholding. I am US citizen living in US
Recently rcvd dividends on the following ADR`s in taxable acct. Can you assist with clarification-Thank RV

TOT(Fr) 15% withheld vs 25%
TLYSS (Aus) 0 vs not listed
TNE(Br) 0 vs 15
E (Italy) 25 as listed
NZT (NZ) 15 vs 30
SCCO (Peru) 0 vs 4.1
SDRL ( I think Bahamas) 0
vs not listed

Paul- sorry Aus was listed at 30%. Missed it due blue highlighting

[...] [4] http://topforeignstocks.com/wp/2011/01/23/withholding-tax-rates-by-country-for-foreign-stock-dividen… [...]

[...] Withholding Tax Rates by Country for Foreign Stock Dividends [...]

David,
Great post. Wish I had found it prior to my purchase of (F)La Farge common stock. I have this stock in my IRA account. Per the French/US Treaty, what will France tax be for dividends and capital gains?

David,
thanks for your response. I’m now considering moving my investment from La Farge (F) to Deuschte Bank (G). This move because you post above, that US/German Tax Treaty recognizes “no tax” on dividends paid to an IRA Account.
Am I right in assuming that there will be “no tax” on capital gains?
Thanks,

What a find your site is!

I’m currently chasing down my broker who insist on applying full 30% WHT (based in Switzerland) on my dividend from US Stock.

I’m a little perplexed by this as I read that by submitting to them (as a withholding agent) IRS form W-8BEN they can exempt me and I pay Swissy net taxes. Don’t want to have to wait 18 months for it though.

30% is a huge chunk out of quarterly income esp. as I want to reinvest it to build up a holding in the stock.

What did make me smile was your chart showing nil rate WHT to US investors of British dividend income stocks. So as a native Brit my own gov treats me less fairly (with the 10% WHT) than a “foreigner”!… Life just ain’t fair.

[...] useful website that lists withholding rates by country can be seen by clicking here. The website home page is topforeignstocks.com, while the link provided is to a posting in the [...]

When my 1100 shares of Shamir optical was paid to me(after Merger and acquisition by Essilor) l 24% was forwarded to the Israeli govt, I was informed that My declaration of status for Israeli income tax purposes was not processed(possibly lost or misplaced) therefore Ameritrade forwarded the 24% to Israel.
Ameritrade tells me its not in their hands and I have to deal with The Israeli tax dept. by myself.
Can you please advise how I can retrieve that 24%.

Thanks

David,

Does the withholding tax also apply to capital gains? For growth stocks in emerging markets, I am less concerned about taxes on dividends. If not, is there any reason why an EM growth stock wouldn’t be a good candidate for my Roth IRA?

Thanks,
Dan

First thank you for this education on Adr stocks.Through my IRA Account I am holding Siemens,ticker SI from Germany
For the last two years I received their dividend minus the
26.4%tax withholding which I like to recover.Would you be
able to show me the way
Thank you
Hubert

I am in the USA and have an international investor who wants to fund my project here in the USA. The investor has actaully tried havign his broker trasnfer the funds into my bank account here in the USA but the broker has informed me the European Tax authority is telling the broker the trasnfer cannot go thru until I pay a 3% tax fee on the funds?? I do not understand this-why do I have to pay a 3% tax fee for the funds I am receiving from the European government isnt it the investor’s responsibility to pay this tax for it is for his investment into my company in the USA not for my investment into his company in Europe. Please help me and any help you may be able to provide please know will be greatly appreciated!!! Thank you!!

Hi David! I’m a permanent resident of Canada wishing to buy stocks in my home country (Philippines). I will be utilizing the cost-averaging method thus, will be buying stocks online on a regular basis. Do I need to pay taxes on dividends earned from these stocks here in Canada?
Thank you.

Can some one provide the new tax slab for WTH tax for foreign investor,or any link ?

South Africa introduced a withholding tax on dividends at a rate of 15% with effect from 1 April 2012. While South Africa has a double tax agreement with the USA the DTA only reduces the withholding provided the shareholder has more than 10% of the voting stock in the South African corporation.

Maybe someone can help me with this question. For countries that withhold a foreign tax on dividends the advice seems to be to not hold those stocks in a tax advantaged account such as an IRA. The thinking is that you can hold it in a taxable account and reclaim the tax paid when you file your taxes but you would still end up paying U.S. taxes on the dividend income. So the benefit of NOT owning the stock in a tax advantaged account is only equal to the difference between the foreign and U.S. dividend tax rate. Am I thinking about this correctly? I just did some quick looking into what the current U.S. dividend tax rate is and could not even find anything definitive. I think avoiding the complication is possibly worth holding the stock in my Roth. Thanks.

Dividend are paid from net income after taxes of course and then the withholding tax on US Dividend paying stocks held by non resident of the US is 30%. Thats certainly not an incentive to attract capital.

Does Canada withold 15% on dividends for U.S. Non profit organizations.

Thanks,

guru

David…..very good information. The withholding tax rate chart is very helpful. Contacted my broker questioning 30% withholding on “Sanofi-Aventis” instead of 25% on my May dividend. Couldn’t locate any info regarding change in France’s tax withholding.

Thanks, for any information.

Chris

[...] portfolio changes. So here are the updated withholding tax rate tables to my earlier post on the same topic last year. Please note that this information is accurate as of Nov 26, 2012 according to S&P [...]

This site is really great. Although it is mostly for US resident, I suspect most countries treat all foreigners the same (before treaties). It would be great if there is also a summary on tax rates on bonds income as well as capital gains.

You have to be careful using discount brokers. Many of them do not observe the tax treaties, and the customer is left having to go back to the country of origin to get a refund. I’m stuck with trying to recover a large Dividend from Siemens. My stock was held in an IRA and, according to your article, no taxes should have been charged, but I got hit with the full 26%+. It’s a difficult and chancy procedure to get it back from Germany. I will try, however.

Hi, I had 1000 share of SAYCY . When this stock withdrew from US stock market,India govt with held 40% tax on it . Is there is any way I can get that tax back >Please Let me Know . Thank you

Hi David,

I want to have VN-Index of stocks in Vietnam market from 2006-2012. How can I get it. Could you help me! Thank you so much, David!

Best wishes for you and your family!

Lanh,IMBA

Hi,

I am holding 200 shares of Safran , a french company and I am Indian and staying India. Since 5 years I am noticing that 25% tax (TDS) is deducted on dividends. Is there way to reduce this ? If yes, what is procedure or formalities that I need to complete it.

Thanks,
Sanjay

best article i’ve ever read on this subject. thank you