Taxes on US stocks for HK citizen?

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  1. #11

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    Quote Originally Posted by kale:
    I remembered reading it off the philip morris website.
    PMI.com Investor FAQs

    O.M.G. !!!
    Thank you so much !!!
    I will have to talk to my broker.
    It also shows that you have to kick ass your broker as they are not
    familiar with the nitty gritty facts of tax withholding regulations.

  2. #12

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    Quote Originally Posted by Morrison:
    O.M.G. !!!
    Thank you so much !!!
    I will have to talk to my broker.
    It also shows that you have to kick ass your broker as they are not
    familiar with the nitty gritty facts of tax withholding regulations.


    Actually, I have a job specialty, working knowledge of US taxes on foreign investors. I was the kind of people that worked in the bank and withheld NRA (non-resident aliens) taxes on behalf of IRS.

    on top of my head, I can give you newmont mining and freeport mcmoran, their div r mostly exempted from NRA tax withholding. do your own due diligence and check their investor relations sites.

  3. #13

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    Quote Originally Posted by kale:
    for hk resident
    debt secrities = no taxes.
    dividends/short term cap gain = 30%
    long term cap gain = 15%
    master limited partnership distribution = 35%
    I know that Charles Schwab for instance here in HK withholds 30% of dividends for US taxes, but this is the first I've heard of capital gains for "HK residents". Are you saying a non-American outside the US investing in US equities has to pay capital gains? That's not my understanding.

    According to Investopedia:

    If you fall under the non-resident alien category and the only business you have in the U.S. is in investments (stocks, mutual funds, commodities) within a U.S. dollar-denominated brokerage firm or other agent, you are subject to the following tax guidelines. In terms of capital gains, non-resident aliens are subject to no U.S. capital gains tax, and no money will be withheld by the brokerage firm. This does not mean, however, that you can trade tax free - you will likely need to pay capital gains tax in your country of origin. In terms of dividends, non-resident aliens face a dividend tax rate of 30% on dividends paid out by U.S. companies. However, they are excluded from this tax if the dividends are paid by foreign companies or are interest-related dividends or short-term capital gain dividends. This 30% rate can also be lower depending on the treaty between your home country and the U.S., so it is important that you contact your brokerage firm to verify the rate. If you are a resident alien and hold a green card or satisfy the resident rules (183 days), you are subject to the same tax rules as any U.S. citizen.

  4. #14

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    weird, I am pretty sure cap gains get withheld. there is short term cap gains and long term cap gains. stcg is treated as the same as div. LTCG at 10%.


  5. #15

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    Quote Originally Posted by kale:
    weird, I am pretty sure cap gains get withheld. there is short term cap gains and long term cap gains. stcg is treated as the same as div. LTCG at 10%.

    from my hands on experience there are no withholdings on capital gains.
    It's 30% on dividend payments paid by US stocks.
    ( with the exception mentioned by Kale, my broker is just checking)
    It's a different percentage for foreign stocks, you will have to check individually.

    And thanks for letting me know about the other companies.
    I will check whether they fit my investment criteria.
    I did some google search on more 80/20 companies, but nothing came up.
    It seems there are not many.Coke is at around 75/25 now.

  6. #16

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    PMI is only 80/20 as they spun off their US business Altria under a different listing.


  7. #17

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    Quote Originally Posted by Morrison:
    from my hands on experience there are no withholdings on capital gains.
    It's 30% on dividend payments paid by US stocks.
    ( with the exception mentioned by Kale, my broker is just checking)
    It's a different percentage for foreign stocks, you will have to check individually.

    And thanks for letting me know about the other companies.
    I will check whether they fit my investment criteria.
    I did some google search on more 80/20 companies, but nothing came up.
    It seems there are not many.Coke is at around 75/25 now.
    okay...I did withheld cap gain taxes for some accounts before.

    mind to disclose your brokerage?

    ideally...i would say get a perm address in china and then mailing address with HK, then claim for PRC treaty rate

  8. #18

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    Quote Originally Posted by kale:
    okay...I did withheld cap gain taxes for some accounts before.

    mind to disclose your brokerage?

    ideally...i would say get a perm address in china and then mailing address with HK, then claim for PRC treaty rate
    Thanks for your reply. I will look into this. Perhaps my broker is making yet another mistake, this time to my advantage.
    And,sorry, don't want to disclose too many personal info.

    As to your suggestion, I think it was Buffett who once said "stick to the rules"

  9. #19

  10. #20

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    Why are we all talking about withholding taxes and 80/20 companies?

    There is no US tax on capital gains generated from the buying and selling of US stocks by nonresident noncitizens.

    There is a 30% withholdling tax on dividends, but if you are looking for income you should buy corporate bonds which are not subject to withholding tax on interest.

    Pretty easy actually.