W-8BEN on your own & 30% withhold

[nabalzbhf]

Like 100k invested in VT? (1564 shares by the end of 2018).

In 2018 you’d have lost 15% of dividends = 382 CHF

[yakari]

i think 30% would be lost here, not 15%.
my understanding:

• for us based etf (vt, etc), 3o%* of dividend taxed away
  – broker qualified -> w8-ben by broker itself -> 15% back -> da-1 by investor -> 15% back ->0% lost
  – broker not qualif: w8-ben not possible (15% lost) -> da-1 not (i am not positive here) possible (15% lost)-> edit: 30% lost
• for irland based etf (vwrl): 15% of div lost (not more, not less), no matter which broker, no refund possible

*Edit: only the the us part of the etf is taxed at 30% (for VT that would be 55.7%; for WVRL 55.0%): so actually the taxation is:

• tax on dividend for us part of etf: dividend% x30% x 55.7% (respectiv 55.0%)
• tax on dividend for rest of the world (not us) part of the etf: depends on etf domicile and its tax treaty with every single country

[Tino]

More and more I read those posts…more and more I get confused…

for irland based etf (vwrl): 15% of div lost (not more, not less)

I had dividends paid lately for the ETF: iShares STOXX Europe Select Dividend 30 UCITS ETF in Euros bought in IB and I got 0%, yes… 0% withheld by IB, or Europe…

Don’t understand why they are withholding the 15% to you… If we are all in Switzerland!

Regards.

[yakari]

Start here:

Tax optimisation for ETF investing

This is a collection of information on taxation of dividends for swiss investors. It’s purpose is to compare different options (for example VT vs. VWRD) on the ETF market from the Witholding Taxation point of view. [writing in progress] Content: Dividend/ Witholding Tax Accumulating vs. Distributing Funds 1. Divident Tax, a.k.a. Witholding Tax a general nuisance to investors is witholding taxes. When dividends are distributed at some stock exchange, governments tend to keep a fraction of it…

[Frank]

i think 30% would be lost here, not 15%.

I don’t see 30% in your examples; either 0% (Swiss qualified broker for US ETF) or 15% (Swiss not qualified broker for US ETF; or any broker for IE ETF). Can you elaborate more?

Thanks!

[Frank]

And did you check Swissquote?

Didn’t call them.
But a knowledgeable guy from Postfinance told me that they used to provide W-8BEN until 2015 (when they operated through BCV, which is TradeDirect), but from 2015, Postfinance e-trading is backed by Swissquote, and Postfinance doesn’t provide W-8BEN (so I suspect also Swissquote doesn’t, i.e. they’re not QI). But we need to 2ble check

[Tino]

Thanks. I’ll read the complete post… is long.
Is really a bit messy all the tax treatment by the different countries/brokers … Hope one day is going to more unified!
Regards.

[yakari]

See my 2 edit in the post

[Frank]

*Edit: only the the us part of the etf is taxed at 30% (for VT that would be 55.7%; for WVRL 55.0%): so actually the taxation is:

I think that 30% withhold (not tax) applies to all the VT (not only to the US part), for the reason that VT is a US ETF.

The case in which it applies only to US stocks inside the ETF (55.7%) is for non-US ETFs. And in that case the tax is 15%, paid by the ETF, so not reclaimable.

Does it make sense?

[nugget]

so I suspect also Swissquote doesn’t [provide W-8BEN]

Swissquote did , at least a while ago.

[OogieBoogie]

This question was raised some times and according to that Swissquote is QI.

US vs. IE based funds if you dont qualify for W8BEN

All Swiss brokers I know of (that is CS, Migrosbank and SQ) are Qualified Intermediaries. So for most us (domicile CH (i.e. with treaty) and QI) US takes 15%, this is “nicht rückforderbar” but at least it gets “angerechnet” by Switzerland (due to treaty) Switzerland takes another 15% (“zusätzlicher Steuerrückbehalt USA”) which gets refunded in the same way as Verrechnungssteuer, if u declare correctly. I would like to know which Swiss Broker is not “respectable” / a QI, cos I don’t know of a…

[yakari]

I think you are right. Thank you.

[Daniel]

This is correct to my knowledge as well.