I have been searching the forum for a definitive answer to my query but have not managed to find one thus decided to just make my own topic instead.
I am a UK Investor looking to invest in stocks in the following European Countries via T212:
Denmark (Not currently available on T212)
Finland (Not currently available on T212)
France
Germany
Netherlands
Switzerland
I am aware that the UK has āDouble Taxation Treatiesā with them all stating that UK Investors are entitled to a specified witholding tax limit which in most of these countries is far less than what they normally take from you but my question is this:
Will T212, as my Brokerage, automatically fill in the necessary āDouble Taxationā Forms on my behalf or am I going to be taxed the higher taxation and have to manually request refunds every time I recieve capital gains/dividends from these Companies?
If it is the latter I will more than likely avoid investing in Euro-based Companies as that is a massive headache to have to deal with everytime I recieve any form of gainsā¦
If the latter is true could we possibly use the workaround of adding the London Stock Exchange Tickers for the Euro-Based Companies to automate the process for us?
@IVIatty4123 Hi Matt. Currently, the latter is true, these double taxation forms arenāt automatically filled in.
As you said, a viable workaround is to add the LSE-listed versions of these EU securities, thatās something we can definitely do.
Please, place a request & weāll add them as soon as we can.
@IVIatty4123 Apologies for the noob question. But would you be kind enough to clarify how the above suggested walkaround of adding the LSE tickets of a EU company would work in automating the taxation documentation process?
Now I wouldnāt take this as Gospel as I am not 100% sure if it will work and I am by no means a Tax Expert but my thought process is thisā¦
Investing in the EU Security directly from itās Home Exchange does not allow the āTax Manā to know you are eligble to the reduced tax rates under the relevant āDouble Taxation Treatyā unless you file a tax relief form annually which would be a headache. But, investing in the LSE Security for the relevant Company (As that is My Home Exchange) should, in theory, already have the reduced taxation applied because the āTax Manā should already know the Security is on a different Exchange to the Companyās Home Exchange and that the Exchange is in a Country that has a āDouble Taxation Treatyā.
Again, this is all speculation as I have struggled to find a definitive answer thus far but time will tell, once the Securities have been added to T212 I can invest in them and see what rate my dividends are being taxed at then move onwards from there.
Tax is a Rabbit Hole that I am trying my best to avoid as much as I possibly can so having it automated would be amazing!
@IVIatty4123 Thank you for the prompt and comprehensive reply.
I did forget to mention that i am also dealing from the UK.
This is certainly an interesting take on the matter.
If I understand this correctly, the T212 platform would result in having (for example) the Adidas share listed in both the āoriginalā ETR:ADS and the LSE:0OLD share. Giving the investor the opportunity/choice in dealing though which ever Stock Exchange he desires.
I understand that this is all speculative but this does sound like a viable āsolutionā.
I am surprised that T212 is willing to provide this service as this would solely benefit UK investorsā¦
Yes, it would mean that we would have multiple Securities for the same Company on the Platform - In fact, there are a couple like this already. Take Unilever NV as an example:
There is also a lot of ETFs on the platform like this too.
If somebody from another Country was to ask the Team nicely to add the relevant Securities (and as long as they have access to the relevant Exchange) I am sure they will add it for them.
As the saying goes - āIf you donāt ask you donāt getā
My english is not my first language so if i understood correctly, when the dividend from the us market comes in my account is automatically taxed???
Ex: i have to get 4$ normal , but if is automatically iām gonna get like 1.45$ or something? so the only thing i need to do in my country is just to declare at the end of the year and not paying or i donāt even have to declare it?
Yes that will likely be why, it sucks doesnāt itā¦ I believe Germany automatically charge a āWitholding Taxā of 26.375% when in fact we should only be charged 15%.
If this goes according to plan then perhaps requesting the LSE Security (LSE:0P6S) will resolve it for you next time round.
To my knowledge, when you sign up with T212 they will automatically submit the US W-8BEN-E form on your behalf so that any income from US Stocks is automatically taxed at the agreed rate with your Country (Most Countries are 15% but it is best to double check this for your own Country just in case).
Each Country is different and has their own set of tax rules in place so it would be worth doing some research on whether you will need to pay additional tax in your Country but in most situations they will have a āDouble Taxation Treatyā with the US which will stop you from having to pay tax twice.
Hello @R0k. For some reason this seems a bit extreme to me but I might well be looking at this incorrectly.
Wouldnāt a ā¬2 dvidend in GER equal to the Raw dividend payable amount minus Witholding Tax amount (26.375% of payable amount), followed by a currency exchange and from that deducting the equivelant UK dividend tax? (according to personal tax class)
So according to the above that would be:
GER payable amount: ā¬2 - (ā¬2 x 0.26375) = ā¬1.4725
UK taxable amount: ā¬1.4725 x 0.88 Ā£/ā¬ = Ā£1.296 (from this deducting 7.5, 32.1, 38.1% based on tax class)
How does a ā¬2 dividend result to a Ā£0.25 payed amount even after all deductions?
I am probably missing something, so i do apologies if this causes some confusion.
I also have a question regarding dividend taxation as I have just received my first ever dividend. So I have received 0.33ā¬ for my 0.78 share of AT&T (ticker T). I can see the dividend per share is 0.47$. However the declared one is 0.52$. So @George what is with that difference?
I did some digging and apparently the tax for Romania is 10% hence the 0.52$ - 10% = 0.47$. The next questionā¦ do you declare this annually (even as it is reinvested) or do you do it whenever you withdraw something from the account?
Hi Boi357, thanks for your reply. I had done some maths myself too before coming here and it didnāt made sense either as I own 1.19 share. Iāve only got very short notification on my phone saying Bayer paid ā¬2 dividend per share and all I have on my account is those 25 pence.
Just for info I do have NIN and pay tax solely in the UK as per PAYEā¦ I am just as confused as you but Iām not really bother atm as Iāve just started investing. Although for future investment I think Iāll stick to UK and US stocks
