EU regulation – automatic tax reporting from 2017 across EU countries

Discussion in 'Retail Brokers' started by Maverick2608, Mar 11, 2019.

  1. From 2017 UK brokers including Interactive Brokers have started to automatically report information on account balances, interest, dividends, gross proceeds etc. to the tax authorities in other EU countries.

    When I compare the account balance and interest that Interactive Brokers UK has reported to the tax authorities in my country, it corresponds to the equivalent reported on IB’s default activity statement except for what can be attributed to rounding error on FX.

    However, I find it difficult to reconcile dividends. I have of course omitted payments in lieu of dividends, and I have added dividend withholding tax, but still a discrepancy larger than what can be attributed to rounding error remains.

    Has anyone experienced difficulties reconciling dividends reported to the tax authorities with dividends stated on IB’s default account statement?
    murray t turtle likes this.
  2. ZBZB


    I think IB report the information to the OECD and then any member country of the OECD can access the data. The IB uk account is considered an offshore account by HMRC as the assets are in the us.
    Maverick2608 likes this.
  3. It seems that IB has made adjustments to several initial entries on withholding tax on dividends. The adjustments often happen the following year. They cancel the original entry by making a reverse entry for the same amount of withholding tax and then post a new entry for withholding tax. The initial withholding tax entry seems to be 15% of the original dividend. The adjusted entry seems to be less than that.

    Anyone has any idea why?
    Last edited: Mar 11, 2019
  4. ZBZB


    Last edited: Mar 11, 2019
  5. And reported to a long list of other countries:
    I'm surprised to see Bahamas on that list.

    However, you were right. It seems to be an OECD initiative and not an EU initiative. The reason I have been informed of the collected information is due to EU regulation, though.
    Last edited: Mar 11, 2019
  6. ZBZB


    Maybe the IB document is out of date as they must have customers in a lot more countries than on the list.
  7. sprstpd


    When you log into your account and go to Reports --> Tax, is there a dividend summary that you can download on that page? It has been my experience that the dividend activity on daily reports or flex statements does not match with the dividend summary and that the summary should be relied on in their place.
    Maverick2608 likes this.
  8. Correction: You should not add dividend withholding tax. The dividend payments listed in the default activity report is the full amount of the dividend before the withholding tax has been subtracted.
  9. ZBZB