I had a similar request a few years ago. My bank ( European bank!) asked me information (beneficial ownership) to avoid that the bank would be responsible for the taxes that might be due in the US. The US can present the bank huge claims. Banks are responsible for their clients. Deloitte did what was needed to solve the problem.
What happens when your tax agreement expires is that IB withholds, in my case, 30% of the settled price. They don't withhold 30 % of the capital gain, even thought they are aware of your gain/loss, but they withhold a percentage of the settled price whether you have a gain or a loss.
Non-citizen, non-resident is not liable for capital gains taxation except for dividends in some cases.
Correct. OP has a far more convoluted (likely sloppy) structure than he is letting us know. @newwurldmn is also right about the "7 Lines"... @trend2009 Let us know how you are structured? Maybe this thread helps others in how not to fuck things up (I like diagrams, very visual!)... PS. It's not Interactive Brokers's fault, it's YOUR fault.
Not all gains are exempt. Partnership gains will still be taxed. This area is complex. 100k in dividend / int income should have originated from substantial investment and it is equally fair to assume someone handling such a large sum will know what they do and have access to qualified tax consultants as opposed to raising in a forum. Ps I am not arguing with you.
yes, it s called Backup witholding tax, quite atrocious, IB might revert the funds if u update the W8Ben, not sure how complicated that could be. I ve had the problem with Etrade over a decade ago when I starting mingling in financial markets, didn t even get a warning that the tax was in place Sorted it out with them, and later moved to IB. Had other smaller issues withe witholding yax over the years btw, I don t trade frequently anymore but still check the IB statements every few days to double check nothing's wrong. Good luck edit: you must have sorted out the issue by now, the message is valid for OP though
Sorted it out with a phone call and possibly a fax. It was years ago. I was taking a 14 day cruise without any internet so I took my account flat. Didn't know I had a problem until I got back. IB customer support was very helpful. Kind of unnerving to log into my account and find it 30% less than I expected.
I had to fill in already a few W-8BEN documents. Each broker I traded with asked that document. W-8BEN is used by foreign individuals who acquire various types of income from U.S. sources. If you are a non-US person that does business in the US, Form W-8BEN will establish your foreign status and allow you to claim tax exemption, or reduced tax rates, on US-sourced income. The US has an income tax treaty in place and FORM W-8BEN will establish your eligibility of treaty benefits. The purpose of the form is to establish: 1. That the individual in question is the beneficial owner of the income connected to Form W-8BEN. 2. That the individual is a foreign person (technically a non-resident alien) and not a U.S. citizen. 3. That the individual is eligible for a reduced rate of tax withholding, or is exempt entirely, due to an income tax treaty between his home country and the United States. Only non-U.S. persons should use Form W-8BEN. U.S. persons file Forms W-9, W-4, and others.