W-8BEN on your own & 30% withhold

[Frank]

@pandas

If broker is not qualified, all 30% would be withheld in favor of the US. You get just 15% back from the swiss by filing DA-1, and have to beg IRS for the remaining 15% - by filing non resident tax return, and beware of tight deadlines, March or so.

“R-US 164” is only for the qualified intermediary case, when the extra 15% are withheld for the swiss (“Zusätzlicher Steuerrückbehalt”), and in many cantons (e.g. ZH) you don’t need it, instead you claim both halves of 30% directly with DA-1.

This seems to be right!

So, I called both Postfinance and TradeDirect.

TradeDirect is a QI and will do a W-8BEN. So I’ll have 15% withheld by US and 15% withheld by CH. It seems (but not sure) I should be able to recover both with tax return.

PostFinance is NOT a QI. So I’ll get 30% deducted by US. I’ll be able to get back only 15% from Swiss authorities, and need to go to IRS to get the remaining 15%.

I think that TradeDirect may be a good option for diversification: a bit expensive with 108CHF annual custody fee, but it’s “AA” rated and Swiss based, which is very good for diversification with respect to a US broker.

Also, I think that IRS tax return (for non-QI case) would be a lot of paperwork. Any experience on this?

Good thread!
Thanks!