Since there is no tax treaty between Monaco and the USA, does a US broker have to withhold taxes on trading gains made by a Monaco resident? In the W8BEN form a Monaco resident declares: "The beneficial owner is a resident of Monaco within the meaning of the income tax treaty between the US and that country." How is this handled? I would appreciate any comments. Thanks. Felix
Assuming you're non-US citizen, non-US green card holder, Monaco resident filling a W8BEN, there is no tax withholding from trading gains (capital gains), or interests etc. you still owe dividend tax 30%. So basically you're trading at 0% tax. Not having a tax treaty it's actually a good thing it means the US government is not entitled to snoop around your business in Monaco and viceversa. Monaco is not interested in your overseas income or your wealth anyway. It works this way: you fill the form and forget about it, no tax return to Uncle Sam, unless you get dividend income, no need to declare trading gains or losses to Monaco. Trade, get money in and out of the account, that's it.
Yeah, basically just don't chase dividend or bond yields. If you want to invest in USA assets for income, set up a company in a country with a double taxation treaty with the USA and relative low corporate taxes (e.g. Ireland), and funnel your income-generating investments there. But trading gains are not taxed.