Dividends &Capital gains tax for foreign investors

Discussion in 'Taxes and Accounting' started by Highterm, Aug 18, 2009.

  1. Highterm


    How are dividends and capital gains taxed for foreign investors and who does the taxin' ?

    For example-
    A UK investor buying a, say, German stock listed on a US exchange, using a Swiss broker?

    Who charges tax on the dividends, the US, the German tax authorities, The UK?

    Who charges tax on any capital gains?

    What if its a US company stock ?

    I'm confused..

  2. nonam


    I think it will depend on the info the trader gave to the broker when he opened the account.In the example you gave I think the tax is owed to the UK.If there is any "withholding" tax on the dividend payed to foreigners then that would be taken in Germany.I think this because the trader is resident in the UK and the company he traded is resident in Germany.
    Basically you owe tax where you are resident if you do not belong to uncle sam.
    If a foreign government took a "withholding" tax you can probably get an adjustment on your UK tax.
  3. Highterm


    What if an offshore company was used to own the stocks?
  4. nonam


    Yes you can evade taxes using offshore companies but it can be complicated and expensive.Elite Trader has plenty of threads about that.The best way for the average Joe to avoid taxes is to get temporary residence in a foreign country where they do not tax you on your foreign income.
  5. Highterm


    To be sure, i don't want to do anything illegal. Just want to know what options are available legally.