Taxation of Foreign traders
- Thread starter une_mon
- Start date
W8-BEN is indeed the form to claim Tax Treaty benefits of a reduced rate of holding but you still have to know what those "benefits" are for your own particular country.
You did not specify what *country* you are a resident of and this is critical since countries, not continents, enter into tax treaties.
In general, there is no U.S. withholding tax on capital gains (ie. purchases and sales of securities), but there may be (varying by country) on dividends and interest. However you may receive an offsetting credit in your own countries tax system.
See the tables by country at
http://www.irs.gov/publications/p515/ar02.html#en_US_2012_publink1000225127
To make it easy on yourself, open with a broker such as Interactive Brokers that has European offices and will therefore be familiar with taxation in both the U.S. and your own country, and be able to provide documents appropriate for filing in most European countries as well. Or open with a European broker. Of course these both deal with trading by Europeans in U.S. securities on a massive scale.
You did not specify what *country* you are a resident of and this is critical since countries, not continents, enter into tax treaties.
In general, there is no U.S. withholding tax on capital gains (ie. purchases and sales of securities), but there may be (varying by country) on dividends and interest. However you may receive an offsetting credit in your own countries tax system.
See the tables by country at
http://www.irs.gov/publications/p515/ar02.html#en_US_2012_publink1000225127
To make it easy on yourself, open with a broker such as Interactive Brokers that has European offices and will therefore be familiar with taxation in both the U.S. and your own country, and be able to provide documents appropriate for filing in most European countries as well. Or open with a European broker. Of course these both deal with trading by Europeans in U.S. securities on a massive scale.
''Tax treaties. Gambling income of residents (as defined by treaty) of the following foreign countries is not taxable by the United States: Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Russia, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, and the United Kingdom.''
What does it mean,''gambling income''?
Quote from TheMagican:
''Tax treaties. Gambling income of residents (as defined by treaty) of the following foreign countries is not taxable by the United States: Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Russia, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, and the United Kingdom.''
What does it mean,''gambling income''?
True gambling - stocks are not included.
By 'true gambling' you mean speculation?am i correct?
So the stock trading activity is a subject for taxation in US for the foreigners,is that true?
Gambling as in roulette, poker, horse racing, etc. NOT including stock "speculation".
I already said above that only dividends and interest are subject to U.S. tax depending on the country. Trading by foreigners is not taxed as such. People from all over the world buy and sell U.S. stocks and futures without paying tax on their gains.
Oh,see you,buddy,thanks.
Good trading to you!
Thanks for the link. I knew trading gains are not subject to US taxes, but did not know about the dividend offset.