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IBHK - obtaining refund of dividend WHY via double tax treaty

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  1. #1

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    IBHK - obtaining refund of dividend WHY via double tax treaty

    Was looking at Euronav as a potential buy and saw that Belgium imposes a 30% withholding tax on the dividend, but there is a double tax treaty with HK that means the withholding should be reduced to 15%. Has anyone dealt with this situation via IBHK before - do you just ask them for the form to fill in and then they arrange to credit your account with the extra 15%? Or is it more complex than that?


  2. #2

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    It really depends on the country that imposes the dividend WHT. So you will need to google how Belgium handles it.

    For example, with US stocks and an investor in China , claiming China treaty rate every three years you submit a form
    ( W8BEN) to your broker in which you claim the treaty rate and the broker just deducts 10%, instead of 30%.


    Recently, I have checked how Denmark handles it and and it is hellish.
    The broker deducts the full amount and the investor has to deal with Danish Tax Authority directly.
    Naturally, they ask you for all kinds of
    proof, so that the avg retail investor will cry like a baby, and give up.

    Last edited by Morrison; 09-06-2020 at 08:49 PM.

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    It's also dual listed in US, but I figure that getting Belgian tax back from a US listed stock when there's no US-HK tax treaty will be complicated. Downside is that IB is the only way I can buy the Belgian listing.


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    This is the response I got from IB - clearly written by someone in the US:

    Please be advised that EURN listed in the US as an ADR.

    As such, the tax treaty between US and Belgium is 30% withholding tax and the withholding tax is applied at the source.

    Interactive Brokers is unable to make client-specific elections, therefore we elect to receive dividends paid at one withholding tax rate that covers our entire client base, called a blanket election. We do not offer a reduced rate or exemption for eligible clients. If a client is entitled to a reduced withholding tax rate or exempt from withholding, he/she should consult his/her tax advisor on how to reclaim the excess tax withheld. IBKR does not reclaim taxes on behalf of clients.

    If you have any specific questions regarding your tax situation, please reach out to a tax advisor.


    Regards,
    Mark A – Interactive Brokers Client Services


    Euronav IR team referred me to a service called Globetax.com who can claim it back for you but the claim needs to be worth $500 minimum - which means at current dividend rates you need to buy about $30k USD or more of the stock.
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  5. #5

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    My strategy for dividend stocks/funds is as follows:

    1. Only buy those that I know to have zero withholding tax.

    2. For everything else, check here to see if Shri has already tried it with HSBC and been succesful.


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    For everything else, check here to see if Shri has already tried it with HSBC and been succesful.
    @Kowloon72 - You should join our small Beers-And-Dividends club sometime and contribute to the experiments.
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    Quote Originally Posted by Kowloon72:
    My strategy for dividend stocks/funds is as follows:

    1. Only buy those that I know to have zero withholding tax.

    2. For everything else, check here to see if Shri has already tried it with HSBC and been succesful.
    My understanding with IB is even with zero withholding tax ETFs they don't pass on the refund.
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  8. #8

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    Quote Originally Posted by pin:
    My understanding with IB is even with zero withholding tax ETFs they don't pass on the refund.
    Yep, and I've had the same experience with other brokers. I worded that badly. I meant stocks from countries with zero withholding, like HK, SG and UK.

  9. #9

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    Quote Originally Posted by Paxbritannia:
    It's also dual listed in US, but I figure that getting Belgian tax back from a US listed stock when there's no US-HK tax treaty will be complicated. Downside is that IB is the only way I can buy the Belgian listing.
    I already mentioned in my reply to your BAT thread that it does not matter where the stock trades.
    So what you need is a treaty between Belgium and HK.
    However, as your broker has written you, you need to claim it back from Belgium tax authorities, all by yourself, which is why I don’t invest in certain stocks.
    I need the money EARLIER for reinvestment
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  10. #10

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    Quote Originally Posted by Morrison:
    I already mentioned in my reply to your BAT thread that it does not matter where the stock trades.
    So what you need is a treaty between Belgium and HK.
    However, as your broker has written you, you need to claim it back from Belgium tax authorities, all by yourself, which is why I don’t invest in certain stocks.
    I need the money EARLIER for reinvestment
    Yes I understand that - the meaning I meant to convey was that I was assuming that IBHK's mediocre US-centric customer support wouldn't realise that and would instead point me to irrelevant US treaties.

    This just reminds me that there's a HK-Canada DTT too and I have some stocks which might benefit from reclaiming dividends in that. Now to look... - it seems IBHK only withheld 15% from that dividend so there's nothing to reclaim actually.

    Belgium

    From some Googling, it seems that Belgium has a website explaining the process and the forms can be completed in English: https://finance.belgium.be/en/enterp...le-property#q2

    Also it seems there is a section of the form where the tax authority of the place of residence has to sign it - IRD must have a procedure for doing this given that they would be responsible for administering the tax treaty in HK, has anyone tried this?
    Last edited by Paxbritannia; 11-06-2020 at 03:24 PM.

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