If the account does not have a valid IRS form W-8BEN for each person related to the account and the required supporting documents, the financial intermediary must withhold 30% of all the sales proceeds in the account and other cash income generated by the company's reorganization. In the absence of a valid IRS form W-8BEN, financial intermediaries must also withhold the highest tax rate (30%) in the accounts of non-American customers, which is higher than the tax rate for residents who generally live in countries with tax agreements with the United States. The financial intermediary agency will report the information contained in the W-8BEN form to the IRS and the account in the form of IRS 1042-S every year. Please refer to IRS Publication 5 15 for more information about the tax rates applicable to non-US residents.
Identify non-Americans
A non-American (non-resident alien) refers to a person who is not an American citizen or a legal resident of the United States. Foreigners include non-resident foreign individuals, foreign companies, foreign partners, foreign trusts, foreign heritages, and others who are not Americans.
If any holder in the account is an American citizen or legal American resident, the account may not be listed as a non-American resident account, but must be opened as an American resident account, and the name of the American customer will be listed as the first account holder. Declarable account activities will be reported using the tax number of the American account holder, and the American account holder must confirm his tax number on IRS Form W-9.
Customers must decide for themselves whether they are American residents. Financial intermediaries cannot determine their residence for customers. However, if the financial intermediary learns that the account holder is an American, all appropriate account activities will be calculated according to the withholding tax rate applicable to accounts that have not been confirmed as American until the IRS Form W-9 is received from the account holder.
What is American source income?
In a nutshell, the definition of "American source income" under US tax regulations is dividend and interest income from securities issued by American companies or American registered mutual funds. In addition, the interest earned from US Treasury bonds and US federal agency bonds are also US-sourced income. 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-US resident foreigners?
(Non-Resident Alien Withholding or NRA Withholding)
Generally speaking, a foreigner must pay American tax for his income from American sources. Taxable investment income includes dividend income distributed by American companies and some interest income. The tax rate for non-Americans is 30%, but depending on the tax agreement between the foreigner's country and the United States, the tax rate may be lower than 30% or exempted from tax. 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 the US-source income of each account of the company in the 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 adviser to determine whether the withholding tax on any income in your account is eligible for foreign tax relief depending on your residence.
W-8BEN and withholding tax for foreigners who are not American residents.
(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-American customers must provide Schwab with a valid IRS form W-8BEN, together with the required supporting documents specified by the IRS or Schwab.
After submitting the IRS Form W-8BEN to the financial intermediary, or before1February 3 1 day of the third year after changing the information on the original IRS Form W-8BEN, the customer must re-prove his non-American residence 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 must also withhold 30% tax on the proceeds from the sale of the account and other income. Non-American residents have lived in the United States for more than 183 days (including 183 days) this year, except those who hold F, J, M and Q visas. If you hold the above-mentioned visa, please indicate the visa type here:
U.S. citizens, permanent residents or foreign residents as defined in U.S. tax laws ………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
The individual who declares tax relief has economic and trade relations with the United States ..................................................................................................................................................................
For details, please refer to the full text of the English version of the IRS W-8BEN. Note: Please fill in the tax form in English.
Part I
1. account name (name of individual or organization that is the beneficial owner)
-> Please fill in your name or the account name of the first account.
2. Nationality (country of incorporation or organization)
-> Please fill in your nationality.
3. Type of beneficial owner.
-> Please select Individual -> * * * Two copies of W-8 BEN must be filled in for the same account, and both the account holder and the * * * same son holder must fill in -> Guardian account, the ward must have American social security number, and W-8BEN is not required.
4. Permanent residence address
-> Foreign accounts must have a non-US address.
5. Mailing address
-> If different from your residential address
6. U.S. tax payer identification number (no need to fill in)-> If you have a US tax number, please fill it in.
7. Foreign tax number (optional) Foreign tax identifying number.
8. First wealth management account number Reference number(s)
Part II
Our country and the United States have preferential tariffs, so the general individuals here please tick A and fill in the nationality (Chinese mainland).
Singapore must fill in Part II Taiwan Province, while Hong Kong SAR does not need to fill in Part II. For other aspects, please refer to the explanation of each category in the translation of 1 building.
Part III (optional)
Part IV signature Sign Here