Lets say a non-resident alien files his W8-Ben (with no tax treaty provisions). According to the IRS, capital gains are tax free in the US as well as "interest-related dividends or short-term capital gain dividends". I have tested the latter by owning an ETF that made a capital gain distribution and there was no 30% withholding. Has anyone tested the former? ETFs such as IEF, TLT, SHY probably qualify as 'interest-related dividends' so in theory these distributions are tax free. I could test it myself but I don't want to wait months for the answer
Do US Bond ETFs withhold 30% in taxes for non-US resident aliens in their distributions?
- Thread starter Daal
- Start date
Apparently the exemption to interest related dividends and capital gains has expired
"Interest-related dividends and short-term capital gain dividends received from mutual funds. At the time this publication went to print, the exemption from chapter 3 withholding on certain interest-related dividends and short-term capital gain dividends paid by a mutual fund or other RIC had expired. To find out if legislation extended this exemption from withholding, go to www.irs.gov/formspubs or www.irs.gov/pub515. See Dividends paid by a RIC , later."
Does anyone know if this is expected to be extended by congress anytime soon?
"Interest-related dividends and short-term capital gain dividends received from mutual funds. At the time this publication went to print, the exemption from chapter 3 withholding on certain interest-related dividends and short-term capital gain dividends paid by a mutual fund or other RIC had expired. To find out if legislation extended this exemption from withholding, go to www.irs.gov/formspubs or www.irs.gov/pub515. See Dividends paid by a RIC , later."
Does anyone know if this is expected to be extended by congress anytime soon?
I don't know if it's the same for an ETF, but for mutual funds:
Permanent U.S. Withholding Tax Relief for Non-U.S. Investors in U.S. Mutual Funds
http://www.klgates.com/permanent-us...s--a-new-distribution-opportunity-01-12-2016/
I had a 30% withholding tax for bonds ETFs: SHY and LQD.
Permanent U.S. Withholding Tax Relief for Non-U.S. Investors in U.S. Mutual Funds
http://www.klgates.com/permanent-us...s--a-new-distribution-opportunity-01-12-2016/
I had a 30% withholding tax for bonds ETFs: SHY and LQD.
Also for ETF
I own MINT from Pimco and dont pay witholding TAX.
In this table see % of payed dividend which are exempt from NRA Witholding Tax
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You had to pay that tax recently?