Generally speaking, non-American citizens or residents must pay taxes to the United States on their income from the United States. As a securities broker in the United States, charles schwab must withhold American income tax for income earned by non-American clients from the United States.
In order to meet the tax declaration requirements of the Internal Revenue Service (IRS), non-Americans must submit IRS Form W-8BEN to the IRS and charles schwab to declare their country of residence, so as to confirm their status as non-American citizens or residents. Charles schwab will withhold US tax according to the country of residence of non-US customers declared on the W-8BEN form of the IRS.
If the account does not have a valid IRS form W-8BEN and the required supporting documents for everyone related to the account, charles schwab must withhold 30% of the total sales income and other cash income generated by the company's reorganization. Without a valid IRS form W-8BEN, Schwab must also withhold the highest tax rate (30%) in the accounts of non-US customers, which is higher than the tax rate of residents who usually live in countries with tax treaties with the United States. Schwab will report the information contained in Form W-8BEN and the account in IRS Form 1042-S to the IRS every year.
For more information about tax rates applicable to non-US residents, please refer to IRS publication 5 15.
Identify non-Americans
Non-Americans (non-resident foreigners) refer to people who are not American citizens or legal residents of the United States. Foreigners include non-resident foreign individuals, foreign companies, foreign partners, foreign trusts, foreign heritage and other non-Americans.
If any holder in the account is an American citizen or a legal American resident, the account may not be listed as a non-American resident account, but it must be opened as an American resident account, and the name of the American customer will be listed as the first account holder. The reportable account activities will be reported using the tax number of the American account holder, who must confirm his tax number on IRS Form W-9.
Customers must decide for themselves whether they are American residents or not. Schwab was unable to determine the client's residence. However, if Schwab learns that the account holder is an American, all appropriate account activities will be calculated at the withholding tax rate applicable to the account that has not been confirmed as an American until the IRS Form W-9 is received from the account holder.
What is American source income?
Simply put, the definition of "American source income" in American tax laws and regulations is the dividend and interest income of securities issued by American companies or American registered mutual funds. In addition, the interest earned from US Treasury bonds and US federal agency bonds is also income from American sources. Therefore, to some extent, if you have dividends or interest from American companies, American registered funds, American treasury bonds or American federal agency bonds, the amount will be included in the annual tax return that we must send to the IRS.
What is withholding tax for non-resident foreigners or NRA withholding tax?
Generally speaking, a foreigner must pay American tax on his income from the United States. Taxable investment income includes dividend income and part of interest income distributed by American companies. The tax rate for non-Americans is 30%, but according to the tax treaty between the country where foreigners live and the United States, the tax rate may be lower than 30% or tax-free. The IRS stipulates that Schwab must withhold this tax from the income paid to foreigners ("withholding tax for foreigners who are not American residents").
Securities brokers in the United States must report to the IRS every year all income from the United States in each account of the company in IRS form1042-s. All income given to foreigners (including non-US resident foreigners, foreign institutions and governments) may also be subject to withholding tax for non-US resident foreigners.
You should consult your tax advisor to determine whether the withholding tax on any income in your account qualifies for foreign tax relief, depending on your place of residence.
IRS Form W-8BEN and Non-US Resident Foreigners Withholding (NRA Withholding)
In order to withhold the correct tax (the tax rate generally ranges from 0% to 30%, depending on the country where the account holder lives), non-US customers must provide Schwab with a valid IRS form W-8BEN and the required supporting documents designated by the IRS or Schwab.
After submitting IRS Form W-8BEN to Schwab, or before 65438+February 3 1 of the third year after changing the information in the original IRS Form W-8BEN, the customer must re-prove his non-US resident status. If we don't have a valid IRS Form W-8BEN record for each account holder, we must withhold the dividend and interest tax in the account at the highest tax rate (currently 30%). In addition, we have to withhold 30% tax on sales accounts and other income.
Note: Please fill in the tax form in English.
first part
1. Name of the individual or organization as the beneficial owner.
-& gt； Please fill in your name or the account name of the first account.
2. Nationality (registered country or organization)
-& gt； Please fill in your nationality.
3. Types of beneficial owners.
-& gt； Please select an individual-> * * * Two copies of W-8 BEN must be filled in for the same account, and the account holder and * * * the same sub-holder must fill in-> Guardian account, the ward must have American social security number, W-8BEN does not need it.
4. Permanent residence address
-& gt； Foreign accounts must have a non-American address.
5. Mailing address
-& gt； If it is different from your address
6. American taxpayer identification number (no need to fill in)-> If you have the American tax number, please fill it in.
7. Foreign tax code (optional) Foreign tax identification number.
8. Reference number of the first wealth management account
the second part
Our country and the United States have preferential tariffs, so individuals here please tick A and fill in their nationality (Chinese mainland).
The second part of Taiwan Province Province must be filled in by Singaporeans, and the second part is not required by the Hong Kong Special Administrative Region. For other aspects, please refer to the explanations of various categories in the translation of 1 building.
The third part (optional)
The fourth part of the signature here.
Form purpose:
This form is applicable to non-US residents who declare US income tax relief to the IRS. If you live in a country that is a reciprocal country of American tax relief,
You may be eligible for tax reduction or exemption. Please visit the website of www.irs.gov State Taxation Bureau for more information. Please send your W8 form to Scott Securities Company instead of IRS.
Form is not applicable: Form should be used (refer to 1 layer comparison, W8 form is only applicable to fixed population).
6? 1 Non-American residents have lived in the United States for more than 183 days (including 183 days) this year, except those with F, J, M and Q visas. If you hold the above views.
Visa type, please indicate the visa type here:
6? 1 U.S. citizen, permanent resident or foreign resident as defined in U.S. tax laws.
6? 1 The individual who declares tax reduction or exemption has economic and trade relations with the United States. ..........................................................................................................................................................
For details, please refer to the English version of IRS W-8BEN.
Simple instructions for filling in the form:
Part I: Personal Data Obtained
Point 1: name.
The second point: nationality.
The third point: company type: individual, please check individual; Please fill in W-8BEN for the same account.
Point 4: Permanent residence address (please don't use post office box or forwarding address, and don't abbreviate the country name. )
Fifth point: mailing address (if it is different from the permanent address, please fill in it separately, and the country name shall not be abbreviated).
Point 6: US tax number SSN, ITIN or EIN (if required).
Point 7: Foreign tax number (if any).
Point 8: The reference number used by the withholding unit.
Part II: Tax Relief Statement (if applicable)
Point 9: Make sure that all the boxes below are used.
6? 1 Tick item A: If the income applicant lives in (country name) during the income period, it is the equivalent country of US tax reduction.
Part III: Statement
I declare that the above information is true and complete.
6? 1 I (or the authorized person) am all the income declarers mentioned in this form.
6? 1 The person obtained is not an American under the US tax law.
6? The income of 1 does not belong to American trade or business activities.
6? 1 In the United States, you are indeed entitled to the reciprocity of tax relief.
In addition, I hereby declare that the withholding agent has the right to withhold my tax.
Signature here: Obtain the signature/date/(month, day, year)/authorized agent of the individual or authorized person.
note:
6? 1 If you change your identity (become an American citizen or resident) after submitting the W-8BEN form, please inform the tax withholding unit voluntarily within 30 days.
6? 1 W-8BEN form is valid from the year of signing to the end of the third year.
6? The Chinese brief description of 1 W-8BEN is provided only for the convenience of customers in China. Our customers should be based on the English original provided by the IRS. you can
Download the full English description of W-8BEN from Scott Securities Form Center, or visit the website of www.irs.gov State Taxation Bureau for more information.
The following is a detailed version.
Official download of form W-8 of IRS in PDF version:
E. Effective correlation with behavior
Refers to American trade or commerce.
Income from trade or business activities in the United States is an individual who is exempt from withholding tax in the United States.
W-8ECI
Foreign partnership, foreign simple trust or foreign authorizer trust (see explanation of exceptions).
Foreign partnership, foreign simple trust or foreign grantor trust (see the exceptions given in the description).
W-8ECI or W-8IMY
Foreign governments, international organizations, foreign issuing central banks, foreign tax-exempt organizations,
A foreign private foundation or the U.S. government that receives effective associated income, or
Claim the applicability of section 1 15(2), 50 1(c), 892, 895 or 1443(b) (see explanation).
Foreign governments, international institutions, foreign designated banks, foreign tax-exempt institutions,
Foreign private foundations, or the United States government,
The government obtains relevant income or claims to apply the provisions of Article 1 15 (2), 50 1 (c), 892,895 or 1443(b) (see explanation).
W-8ECI or W-8EXP
Note: If these entities are applying for agreement benefits or providing forms only to apply that they are foreigners exempted from back-up withholding tax, form W-8BEN should be used.
Remarks: If the above-mentioned entities wish to obtain preferential treatment in tax treaties, or only provide forms claiming to be foreign residents who are not subject to withholding tax, they should use Form W-8BEN.
A person who acts as a middleman.
An individual who acts as an intermediary.
W-8IMY
Note: Please refer to the description of other exceptions.
Note: Please refer to other exceptions given in the description.
The first part is the identification of beneficial owners (see description. ) Identity of beneficiary (see description).
1 Name of individual or organization as beneficial owner: (insert your name)
2 country of registration or organization (fill in China)
3 Beneficiary Type: Beneficiary Type: (Generally, you can choose the first type, individual)
Individuals, individual companies, joint-stock companies deregulated entities, non-independent entities, partnerships, simple trusts, simple trusts, grantors' trusts, complex trusts, real estate governments, international organizations, international organizations, central banks, foreign designated banks, tax-exempt organizations, private foundations, private funds.
4. Permanent address (street, apartment. Or suite number, or country route). Don't use post office box or care-of address.
Permanent residence address (street, room number or postal route). Please do not fill in the post office box or care-of address, please fill in English. Reference: Principles of English Address Writing and Translation
City or town, state or province. Include postal codes where appropriate. City or township, province, including postal code.
Country (Don't abbreviate) Country (Don't use abbreviations)
5 mailing address (if different from the above) mailing address (if different from the above address).
City or town, state or province. Include postal codes where appropriate. City or township, province, including postal code.
Country (Don't abbreviate) Country (Don't use abbreviations)
6 US taxpayer identification number (if necessary, please refer to the description)
U.S. tax identification number (provided upon request, see description)
7 Foreign tax identification number (if any) (optional) (SSN or ITIN and EIN are optional) Foreign tax identification number (optional).
8 Reference number (see description) Reference number (see description).
Part II Claims for Preferential Tax Treaty (if applicable) Preferential Tax Treaty Treatment (if applicable)
I confirm (check all that apply): I hereby declare the following (select all that apply):
A the beneficial owner is a _ _ _ _ _ _ _ resident in the sense of income tax between the United States and that country. The beneficiary lives in _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
B. If necessary, the U.S. taxpayer identification number is stated in line 6 (see description).
If necessary, line 6 gives the U.S. tax identification number (see description).
C. The beneficial owner is not an individual, and the income item (or items) obtained by him requires to enjoy the benefits of the agreement, and if applicable, meet the requirements on the limitation of benefits in the terms of the agreement (see the explanation).
The beneficiary is not an individual, has one or more incomes that can enjoy the benefits of the tax treaty, and meets the requirements of the restrictive clauses of the tax treaty where applicable (see explanation).
D the beneficial owner is not an individual, and is applying for the treaty benefits of dividends received from foreign companies or the interests of foreign companies' trade or business in the United States, and meets the status of qualified residents (see the explanation).
The beneficiary is not an individual, and the dividends he receives from foreign companies and the interest income that foreign companies receive from their business in the United States are required to enjoy preferential treatment in tax treaties.
And abide by the regulations on resident status. (see instructions)
E the beneficial owner is related to the person who has the obligation to pay the income as referred to in section 267(b) or section 707(b). If the total withholding amount received in a calendar year exceeds USD 500,000, Form 8833 will be submitted.
The beneficiary is related to the individual who is obligated to pay according to Article 267(b) or Article 707(b). If the accumulated withholding tax revenue exceeds $500,000 in a calendar year, Form 8833 will be filled out.
10 special rates and conditions (if applicable-see description): the beneficial owner claims the provisions of Article. . . . . . . . . . . Statement a of the treaty defined in line 9a above. . . . . . . % withholding tax rate (specified income type): explain why the beneficial owner meets the terms of the treaty:
Special proportion and conditions (if applicable-refer to the explanation): the beneficiary requests the return. ......................................................................................................................................................
Explain the specific reasons why the beneficiary meets the preferential terms in the tax agreement.
Part III Nominal Master Contract
1 1 I have provided or will provide a statement to identify those nominal main contracts whose income is not effectively related to trade or business in the United States. I agree to update this statement as necessary.
I have provided or will provide a statement that the income generated by the nominal main contract has nothing to do with trade or business activities in the United States. I agree to update this statement as necessary (this is optional).
Part VIII Certification Certificate
According to the penalty for perjury, I declare that I have checked the information in this form and that it is true, correct and complete to the best of my knowledge and belief. According to the punishment of perjury, I further prove that:
I hereby declare that I have carefully checked the information in this form and proved that it is true, correct and complete to the best of my knowledge, and I am willing to bear the punishment of perjury:
● I am the beneficial owner (or authorized to sign on behalf of the beneficial owner) of all income involved in this form, and I am the beneficiary (or authorized to sign on behalf of the beneficiary) of all income involved in this form.
The beneficial owner is not an American, and the beneficiary is not an American resident.
● The income related to this form has no actual connection with the trade or business activities of the United States, or although there is actual connection, it is not taxable according to the income tax treaty, and
The income involved in this table does not come from commercial or trade activities in the United States, or although it is related, it is not taxed according to the income tax agreement, and
● For brokerage or barter transactions, the beneficial owner is the evacuated foreigner as defined in the instruction. For intermediary transactions or physical transactions, the beneficiary is said to be a tax-free foreigner.
In addition, I authorize to provide this form to any withholding agent who controls, receives or keeps my income from providing this form, or any withholding agent who can pay or pay my income as the beneficial owner.
In addition, I authorize that this form can be provided to any tax agency that has the function of controlling, receiving and supervising the income involved or the institution that actually pays tax reduction and tax refund to me as the beneficiary.
Sign here.
Sign here.
Signature of beneficial owner (or an individual authorized to sign on behalf of beneficial owner)
Signature of beneficiary (or individual authorized to sign on behalf of beneficiary)
Date (Year Month Day) Date (Year Month Day)
The identity of the authorized agent.
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