As an Investor in the US markets, you'll need to complete an electronic declaration form called W-8BEN. This allows you to pay a lower Dividend Withholding Tax (“DWT”) when you receive dividends from a source within the US, and you are not a US tax resident.
The form will appear on your screen once you log into your USD account.
Who can complete the W-8BEN
Non-US citizens invested in the US who will receive dividends from any US-listed company but haven’t declared them yet.
What happens if you do not declare using the W-8BEN form?
Instead of paying a reduced tax amount, you will be liable for Dividend Withholding Tax (DWT) at the maximum rate of 30%.
Below are the Steps to complete your W-8BE form
Steps for Individuals to complete the W-8BEN declaration
Once you log in to your account, as an investor who does not reside in the US but has invested in US shares, you will be prompted to complete the declaration and to fill in all required information.
Here are some guidelines to ensure you complete the form accurately:
Review your name and residential address
Check that the information we have for you is correct. If your residential address is incorrect, you will need to update it under your profile.
If your mailing address is different from your residential address, uncheck the box “Mailing address is the same as above” to add your mailing address.
We use your Tax Residence to determine whether you are eligible to claim a reduced rate of withholding under the tax treaty between the U.S. and that country. This is only applicable to Non-U.S. citizens.
We are not able to claim special rates and conditions on your behalf; if you require such services please contact the IRS directly.
The tax rate you pay is determined by the country you are a resident in, take for example:
South African citizen example:
South African tax residents are only liable for a 15% DWT on dividends received from the USA. This tax rate differs from one country to another and depends on the Double Tax Treaty your country has signed with the IRS.
If you do not have a US Taxpayer Identification Number (TIN), then you do not need to fill in anything. Select the “No” option.
If you do have a TIN, select “yes” and complete the fields for the TIN and TIN type.
From there on, you can read and agree to the certification to complete your form.