W-8 changes 15.05.06 - important

[RedManPlus]

Quote from IBj:

You are not correct. US government regulations have made it the responsibility of most financial institutions who do business in the US, or want to, to enforce their policy. IB does not set the policy.

IB is not giving you the runaround. We aren't in the tax advice business, period. We can only tell you we are enforcing a regulatory law. We are not specialists in international tax law to explain how that law may or may not affect you. Everyone's tax situation will be different.

See a tax specialist if you want advice. The only advice IB can give you is what is legally demanded of us when you don't fill out the appropriate form(s).

IBJ,

Lets have a civil conversation.

You did not address the point of my post...
Which is the inability to find out ** anything ** about my present W-8 status.

I got nowhere on the customer service line...
Which 99% of the time routes you to the US where they don't handle Canadian issues.

Finally I emailed my "Executive Representative"... and this was his repsonse:

------------------------------
I am very happy to hear that your move to IB was a good one, and hope that the first quarter of 2006 has been profitable for you.



Regarding the W-8 renewals, I am checking into this for you just to make certain that the forms indicated below are indeed the correct ones. I will get back to you as soon as I receive verification. As always, should you have any questions or concerns, please do not hesitate to contact me.

-----------------------------------

IBj, that was April 18th... and he ** never got back to me **.

I just have one simple question to start...
Which form is on file now?

I do not recall filling out different forms for 2 different accounts?

If I am just ** renewing ** a W-8 form currently on file...
Then it's an easy decision... I'll just do it.

If I am CHANGING the W-8 form on file...
Then it's a matter that has to be addressed by my Auditor and Tax Specialist.
Frankly, he will then handle it.

Can you find out what is on file?

Otherwise... please don't give me another long speech...
I've been running a million dollar cross-border business for over 10 years


rm+

 

[local_crusher]

Please let me bring down things here to the central question:

Assumptions:
- IB accountholder
- a nonresident alien (let's assume an EU-citizen)
- a valid W-8 has been filed.

In the above situation, in the past, there were only backup withholdings on dividends (form 1042S).
There was no withholding on interest, on profit or proceeds. No matter what currency.

Now, will this change in the future -
Given that a correct W-8 has been filed ?
Will there be any direct withholding (at a rate below 30%, subject to these ominous "tax treaties") on interest, profit realized or trade proceeds ?

(IB should be able to answer that question because they need to make the appropriate programming to enforce the rule.)


Thanks to IBj for the effort.

 

[RedManPlus]

Quote from IBj:

You are not correct. US government regulations have made it the responsibility of most financial institutions who do business in the US, or want to, to enforce their policy. IB does not set the policy.

IB is not giving you the runaround. We aren't in the tax advice business, period. We can only tell you we are enforcing a regulatory law. We are not specialists in international tax law to explain how that law may or may not affect you. Everyone's tax situation will be different.

See a tax specialist if you want advice. The only advice IB can give you is what is legally demanded of us when you don't fill out the appropriate form(s).

"You are not correct".

Just to address this...
BOTH the Account Holder... and the Financial Insutution have a responsibility to fill out the correct W-8 form.

But...
Only the Account Holder will have any repercussions if IB gives him the wrong form.

Anyway...
I just talked to Customer Service...
And they did finally find out...
They said by "talking with a programmer"...
That IB is forcing me to change from a W-8BEN form to a W-8IMY form.

This may in fact be correct...
But I have to get this approved by my auditor CPA... a bona fide tax expert.

If my CPA feels the change is inappropriate...
Then he can contact via Fedex the Compliance Manager in Chicago... Jeff Bauch.

That's all I need to know...
But it took me 2 months to get this information.

No further assistance is required. Thanks.

rm+

 

[local_crusher]

Quote from local_crusher:

Please let me bring down things here to the central question:

Assumptions:
- IB accountholder
- a nonresident alien (let's assume an EU-citizen)
- a valid W-8 has been filed.

In the above situation, in the past, there were only backup withholdings on dividends (form 1042S).
There was no withholding on interest, on profit or proceeds. No matter what currency.

Now, will this change in the future -
Given that a correct W-8 has been filed ?
Will there be any direct withholding (at a rate below 30%, subject to these ominous "tax treaties") on interest, profit realized or trade proceeds ?

(IB should be able to answer that question because they need to make the appropriate programming to enforce the rule.)


Thanks to IBj for the effort.

sorry but - bump.

 

[juliogonz]

are affected, the gains with European stocks ?

 

[IBj]

Quote from juliogonz:

are affected, the gains with European stocks ?

Good question.
I don't know what are the rules if a non-US person fails to complete a W8, and trades exclusively in non US instruments, for example German stock.

I will find out.

 

[juliogonz]

Also, Canadian Stocks

Thanks

Quote from IBj:

Good question.
I don't know what are the rules if a non-US person fails to complete a W8, and trades exclusively in non US instruments, for example German stock.

I will find out.

 

[giggollo]

What happens if a non-US person with a valid W-8 on file with IB fails to fill out the new updated W-8 by May 15th? What are the repercussions if the account is inactive? Can he just come back and fill it in 6 months if he decides to start trading with IB again?

 

[crazy_trader]

Not 100%, then I think you will have to file US tax return to get back the withholding.

Quote from giggollo:

What happens if a non-US person with a valid W-8 on file with IB fails to fill out the new updated W-8 by May 15th? What are the repercussions if the account is inactive? Can he just come back and fill it in 6 months if he decides to start trading with IB again?

 

[IBj]

Quote from giggollo:

What happens if a non-US person with a valid W-8 on file with IB fails to fill out the new updated W-8 by May 15th? What are the repercussions if the account is inactive? Can he just come back and fill it in 6 months if he decides to start trading with IB again?

For all intents and purposes, the old W-8 is invalid so not completing the new form will be as if you had never filled out a W-8 at all. The new W-8 requires info not requested previously and, as you can imagine, an incomplete government form is a like a lake without water: it serves no purpose and is not usable.

If you dont trade, and there is no money, then the issue is moot anyway. If you have interest income, it will be withheld at the default rate as if you had not filled out the from.