Hello, does anyone know what is the IB taxation policy for multicurrency accounts, non-USD base currency, that trade in US ? Has anyone been required to fill up any form in order to avoid double taxation to non-US residents ? Thanks.
I tnoiced that when a MC or Universal account is opened via IB UK they don't require an IRS form W-8BEN or other applicable W-8 to be filed which is necessary to claim tax treaty benefits. This can mean one of two things: Either IB would be required to do full backup withholding on those accounts or IB UK itself has registered with the IRS as a financial intermediary by filing a form W-8IMY. In the latter case the withholding rates (if any) are governed by the tax treaty between the US and the UK. Now if you as the account holder reside in a third country your countries tax treaty with the UK may impose additional withholding requirements on IB UK... But at this point this is starting to stretch my expertise on the subject. Personally, because of this tangled web of tax questions with IB UK and due to IB's helpdesk's inability or unwillingness to shed any light on those questions I have chosen to open my Universal account with IB US which lets you claim tax treaty benefits directly via a form W-8BEN. It's possible, you just have to trick the application process into letting you do it.
I know IB doesn't want to deal with the cost and hassle of withholding tax. The uni account apps are technically still in beta so I'll bring it up.
I don't know whether I would be allowed to open a mc account at IB US (I am not US resident). Anyway this tax matter for people who open accounts through IB UK and are not UK resident is very obscure. No form has been asked me to be filled for tax purposes. I would appreciate very much if Def or another IB representative could make this issue more clear (I have posted also at IB forum, but no reply).
I have confirmed that IB UK and IB Canada are not US entities and therefore do not have a requirement to submit W8's.
Looks like we did touch on a weak spot here. Now all of a sudden IB UK starts requiring people to submit IRS form W-8BEN. That means that unlike what def suggested above they are definitely not registered as foreign financial intermediaries with the IRS. Dave
IB have mail to us that it is required to fill it, our fund are freeze until this will be completed. This could be also a partial explanation that why on their FAQ that they will never offer RRSP account (IRA for Canadian).