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Issue with Investment Managed by Citibank Singapore

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  1. #1

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    Mar 2013
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    Issue with Investment Managed by Citibank Singapore

    Hi,

    I would share a issue my dad is facing with a US-based bond has invested in through Citibank Singapore.

    In December 2019, he noticed that 30% had been deducted from the coupon. After multiple phone calls and emails with his relationship manager, another staff member had revealed (as my dad had suspected) that it was taxed because his W-8BEN form (that declares foreign status) had not been submitted on time--clearly due to lapses on their part.

    Now, the relationship manager says nothing can be done and fails to take any responsibility.

    Why should the customer bear the loss for lapses on their part?

    Should we escalate the issue with senior management and how to proceed?


  2. #2

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    Where does dad live ?

    I did a quick Google thing, it seems there is no tax treaty between those two countries,
    so it's 30% withholding tax at source even with a W 8 BEN.
    The form exists for claiming a taxi treaty rate, which is usually lower than 30%.

    There is also no treaty with HK.

    If he can claim a reduced rate by a treaty then there is a 30 days grace period for late submittal, afaik


  3. #3

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    Hi my dad lives in HK. And previously, he has submitted the form and everything was fine.


  4. #4

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    What sort of bond? Corp, gov, muni?

    It really should be Citi's problem to fix, since they mentioned that the delay was on their part.


  5. #5

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    Corporate. The relationship manager did not mention but the staff he had CC'ed the original email flagging the issue said so.

    Also, considering Citibank is based in the US, I would have expected them to be more familiar with these requirements and communicate on time.


  6. #6

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    Standard withholding tax on a corp payment should be 30% - the tax form should not make a difference.

    Have you received payments for this bond without the 30% WHT deduction??!?


  7. #7

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    Usually you get an email notification once your form is expired, but in your case it does not make a difference anyway.


  8. #8

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    err.. u buy the bond when your W8 is effective.. then it lapsed.. then now your tax status get affected.. shld be something happens quite regularly (since i sometimes ignore the w8 if my position is small)

    shri likes this.

  9. #9

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    Original Post Deleted
    The bank is probably a so called Qualified Intermediary and thus is not obliged to forward customer's information to US IRS , and on top of that messed up the regulations internally.

    @freeier, I think what jrkob meant is once your Ben has expired they should freeze your account.


    https://www.irs.gov/businesses/inter...ry-information

  10. #10

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    Quote Originally Posted by Morrison:
    @freeier, I think what jrkob meant is once your Ben has expired they should freeze your account.
    but if you already holding a bond.. they can't force sell it !? without the W8B form you are just not enjoying watever tax benefit you are suppose to enjoy/suffer as a foreigner...

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