Withholding tax on US dvidends (WHT) - Delaware corporates

T

tonyf

The going WHT rate is 30% for foreign investors (save the ones residing in countries having a treaty with the US.

How is the dividend paid by a Delaware entity treated? Is it subjected to WHT as well?
 
I'm not sure what WHT is. I 'm familiar with the term "NRA withholding" for those that file a W8BEN or W8BENE etc. If your Delaware entity files a W9 with a valid IRS EIN and current US address, we do not have any withholding. It is my expectation that the owners of the entity will have to pay a IRS tax in some way. You might be better off filing for a NRA refund.
 
Robert Morse said:
I'm not sure what WHT is. I 'm familiar with the term "NRA withholding" for those that file a W8BEN or W8BENE etc. If your Delaware entity files a W9 with a valid IRS EIN and current US address, we do not have any withholding. It is my expectation that the owners of the entity will have to pay a IRS tax in some way. You might be better off filing for a NRA refund.
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W8BEN filed. Does the NRA apply to foreign investors?
 
tonyf said:
so Delaware entities are subjected to the same then?
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A Delaware entity with a legal US address and IRS EIN# would file a W-9. If you file the W8BEN because the W-9 does not fit under the instuctions in the W-9, you will be subject to withholding. Please consult the instructions to decide what is correct. I can't decide this for you. https://www.irs.gov/pub/irs-pdf/fw9.pdf
 
A Delaware entity might be exempt from state tax (IIRC) but it will be subject to US federal tax. So do dividends will be taxed, furthermore you will probably have to pay an accountant to do the taxes in addition to the annual costs for the entity, raising the costs further
 
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