US withholding tax

[CDNPatriot]

Anyone know what this is? Forms were sent to me by my broker do I need to fill them out and send them to Rev Canada or the IRS in the US for a refund? I trade in US funds and use Interactive broker.

[pitz]

You should have filed a W-8BEN with your broker. This would qualify you for 15% IRS withholding.

On your Canadian taxes, you then claim "foreign tax paid" as the amount of the withholdings. You don't actually get a 'refund' from the IRS unless you are a US tax filer.

BTW, don't trust the paperwork that Interactive Brokers gives you insofar as T3/T5/T5008's. Much of it is often wrong, especially concerning the allocation of dividends paid at the end of a calender year.

[aznfoos]

You should have filed a W-8BEN with your broker. This would qualify you for 15% IRS withholding.
.

You will also need a ITIN or SSN. I just applied for an ITIN with the IRS before you can file a W-8BEN.

[pitz]

I've filed W-8BEN with my broker for several years now, and do not have an ITIN.

[aznfoos]

You will also need a ITIN or SSN. I just applied for an ITIN with the IRS before you can file a W-8BEN.

hmm...i guess the IRS isn't that stringent on that ITIN. The instructions specifically say that non-US residents will need an ITIN to apply for the W-8BEN. O well, I might as well wait for it to come back...I'm sure having one has other uses somewhere.

thanks.

[Ohboiya]

Can someone explain what these acronyms mean?

I'm thinking of investing in some investments listed in the US that pay interest. I just don't want to have to pay any withholding taxes.

Is dividend income treated different than interest income?

Thanks!

[batman321123]

Wait so IB holds some of the profits you make from trading stocks on US exchanges?

[CROSSBORDER TAX/LEGAL PRO]

You say "trading". In general, no w/h tax on mere trading of person who isn't defimed as a trader since under the Treaty cap gains are sourced to residency (and Cdn in this case).

However, often passive income, such as div or int, is distributed and those are generally subject to w/h tax and withheld by the intermediary, often the IB.

Good news is that under new recent treaty proposal, good chance we'll soon see 0% cross-border w/h on interest.

[batman321123]

You say "trading". In general, no w/h tax on mere trading of person who isn't defimed as a trader since under the Treaty cap gains are sourced to residency (and Cdn in this case).

However, often passive income, such as div or int, is distributed and those are generally subject to w/h tax and withheld by the intermediary, often the IB.

Good news is that under new recent treaty proposal, good chance we'll soon see 0% cross-border w/h on interest.

Thanks, you're a lot more helpful without the spam!