If got tax treaty, you file another form to reduce tax withholding

You sure? Cause if doesn't matter is fantastic. But if banks and others financial companies were to jump at the word united states and US income tax no, is no good.

Anyway as mentioned above, I will rather pay the taxes then try to claimed it back even if we are entitle to claimed. Better safe than sorry. Is the US govt. I don't want to mess with US govt.

This post has been edited by Ramjade: Aug 17 2019, 08:37 PM

Bro,.. since we are on this subject, there are certain interest incomes that are not taxed at 30%, and are tax-free to the Non-Resident Alien. We call these incomes as QIIs - Qualified Interest Incomes.

If we invest into these instruments, we would not need to pay US tax on such incomes,...

Yup, also got qualified dividend income. 0% tax or somewhere in between, depending on the investment. Ideally the broker should deduct correctly. If over deduct 30% you do IRS filing to claim it back. IRS will send you a USD check or direct deposit to your US account.


This post has been edited by dwRK: Aug 17 2019, 10:16 PM

Thank you, dwRK,...

Hi all.

I have some questions with the concerns of messing up with the US government. I understand about the concern especially with the CRS (common reporting standards) being adopted in many countries these days.

As for tax no., I believe the US tax no. id officially called TIN or Tax Identification No. As far as I know, even a TIN is required when you fill up the W-8BEN form, which concerns with the 30% WHT. So, every NRA like us who invest directly in the NYSE (dividend-paying stocks or ETFs) will be required to fill up the W-8BEN form even if we don't ask for the "50% WHT refund".

So, is Ramjade trying to say that one should not even invest in the NYSE directly? (since you already need to file a tax form with a TIN on your W-8BEN)

Referring to the bolded part, pay the tax and try to claim it back? Isn't that what I am asking here and you are against it? Now you are advocating it here? Or a typo?

As for those who suggest to buy funds try UCITS, I am aware of the benefits.

Just one concern, most USD-denominated UCITS are traded on LSE and SIX. And their markets are less liquid than NYSE. Can anyone recommend brokers in Singapore or Malaysia who deal with the Vanguard S&P 500 UCITS on LSE or the iShares S&P 500 UCITS (Accumulating class, USD-denominated) on either LSE/SIX?

I am a long-term investor, so Interactive Broker is not suitable for me as I don't have 100k USD anytime soon, nor do I want to pay 10 USD per month for commission. I am looking for something similar to TD Ameritrade, one-off commission, and can last forever. It's kind of unfortunate that TD Ameritrade only offers trading in US markets.

Thanks for the help, everyone.

TIN is basically just income tax. If you pay tax in Malaysia, the TIN in he form is your Malaysian income tax no. Country: Malaysia.

Wben8 is so that you won't be tax on capital gains. As mentioned by people above, you can only claimed back if your country got treaty with US govt. Malaysia don't have. And to claim the dividend tax back, I believe you need to have a US income tax no.

You can invest but what I am saying is just pay the damn 30% tax. Don't even try to claimed it back even if you can (which we Malaysians can't). Forgo it. Considered it burnt. You don't want to mess with US IRS. Just let them earn the 30% tax.

Forget about using Malaysian or Singapore brokers to buy US ETF (bases in NYSE/NASDAQ/LSE). Not worth it with high commision, markup exchange rate, dividend fees, quarterly platform/holding fees. Very expensive in the long run. Why let them earn extra?

Know what you want. You want to save on dividend fees or you want to trade?
If trading US.
If buy and hold and to save on dividend Ireland domiciled listed on LSE.
Keep it simple. You cannot have both. Pick one.

Who asked you to use the pure Interacrive broker? Use their whitelabels (rebranded version of Interacrive broker). Kindly read back last 10 pages of this thread. People have been kind enough to share. Whitelabels cost USD2-3/transaction minus the monthly USD10, fee.
Pure IB cost few cents per transaction (if you use tiered pricing) but comes with monthly USD10 charges.
Your choice. I am using Whitelabels.

TIN is Tax Identification Number, given by the IRS for ppl who wanna file a return, but don't have a SSN (social security number). It is not our LHDN tax number.

W-8ben tell the broker you are a NRA and to apply 30% WHT. You don't need to do anything else. If you are a US person with SSN you will need to file a W-9 form; in January the broker will provide you a bunch of income tax statements for you to file your returns with IRS.

This post has been edited by dwRK: Aug 18 2019, 09:46 PM

For cheap brokers look up "tradestation international" or "captrader"...both IBKR whitelabels. Like Ramjade bro said forget about local brokers.

Ok, please check the facts below:

1. TIN is NOT the same as US Income Tax No.

2. You need a TIN when filling up the W-8BENN form, which is used to avoid paying CGT to the US since we are NRAs. (This is the form required for all of us to fill up when we decide to trade directly on the US market.)

3. You need a US Income Tax no. when filling up the 1040NR form to claim back the 30% WHT which is NOT possible for Malaysians since there is no tax treaty with the US. (So, basically the first post of the thread is wrong, for Malaysian investors, that is. It is not possible to claim back ANY portion of the 30% WHT for us NRAs without tax treaty of any kind with the US, correct?)

Please check the above 3 facts.

And so there is NO issue trading directly on NYSE, the TIN is NOT an issue at all. I just keep paying the 30% WHT to the US government while trading with my broker on TD Ameritrade. There is no worries about FATCA even though I trade with TD, as long as I don't mess up with the US gov by claiming ANY portion of the 30% WHT back.

The only concern here is claiming back ANY portion of the 30% WHT. If I do so, I mess up with the US gov because I will have a US income tax no by then and have to deal with FATCA.

If however, I choose to keep paying the 30% WHT (which means I only fill up the W-8BEN form), I will have no issues messing up with FATC/US gov etc., even though I will be required to have a TIN.

In short, no worries about trading NYSE on TD Ameritrade TOS platform, as long as I don't claim back ANY portion of the 30% WHT.

Correct?

As for brokers' choice (if I choose not to trade with US brokers):

I am a long-term trader who wants to save on commission and looking for platforms without ongoing charges of any kind, including custody fees, inactivity fees etc.

One single trade would be 7000-10000 USD for me (of course if the commission is low enough to account for less than 1% of the trade amt, then I will go for a lower trade amount, maybe 3-5k USD)

I know IB is a stupid choice for me, and I am aware of the whitelabels. But I don't know which is good?

I am looking for investing in USD-denominated accumulating class (so no dividend handling charges) UK/Swiss ETF (Vanguard S&P 500 UCITS or iShares S&P 500 UCITS)

I know about Captrader and TradeStation. But Captrader only trades in Euro (I prefer USD shares, so that currency is my own liability) and I can't tell if Tradestation trades in LSE/SIX (can't find the market info on their official page. I only know they trade in the "US and worldwide" https://www.tradestation.com/about/)

I also looked up eToro, but they don't have accumulating class UCITS, only a distributing one. Moreoever, it is traded in GBP, not USD https://www.etoro.com/markets/iusa.l

Any good suggestion? Or I have to relax my requirement?

Thanks for the help everyone.

As for ETF requirement,

If an accumulating class is not possible, please suggest brokers with dividend reinvestment plans but NO dividend handling charges or any kind of charges. TQ

There is some accumalating ETFs available eg CSPX for S&P 500 on LSE.

If IB is out of reach one of the whitelabels will be similar - not a huge difference if you're buying to hold.

[quote=TOS,Aug 18 2019, 10:14 PM]
Ok, please check the facts below:

1. TIN is NOT the same as US Income Tax No.
Same. IRS uses SSN or TIN

2. You need a TIN when filling up the W-8BENN form,
Nope, unless you ald got one.

3. You need a US Income Tax no. when filling up the 1040NR form
Yes

So, basically the first post of the thread is wrong, for Malaysian investors, that is. It is not possible to claim back ANY portion of the 30% WHT for us NRAs without tax treaty of any kind with the US, correct?)

Yes & No. QII type investment can claim back some %

Just keep it simple OK? TIN is your income tax no with LHDN (for us Malaysisns). US call it TIN, you can call it what you want. Is a tax no for your country. Let's say you are AU CITIZEN with income tax no of 12345678. TIN will be 12345678. Country will be Australia. Understand? That's what you fill up into WBEN8 form or whatever form asking about income tax/tax residency. That's how I fill it up. Cause the broker will not accept if I leave it empty. I filled it up, give them a copy of my tax filling with LHDN.

You don't need to fill up other forms except for WBEN8 as a NRA. No issue with trading as you won't be charged CGT. Only dividend tax. Since Malaysians can't claim anything back from US govt no need to worry.

If in the future, somehow you found a way to claim money back from US govt, then is better to get a tax advisor on what to do so that FATCA will not come after you. FATCA is designed to catch Americans and for Americans. If you are filling up the wben8 form only, don't need to bother about FATCA. Bother about how you are going to explained to LHDN if your income is not tax in a Malaysia (before you use it to buy stocks/etf from your broker. If already taxied by LHDN, then you are fined unless you under declare)

If you buy accumulating ETF, you will still be slapped with 30% tax before the divided will auto be reinvested back in. Cannot run away unless you buy from LSE.

Wrong. Captrader does not trade in Eur. You can select your base currency as USD upon creating account and you still login using Interacrive broker. Sign up part only deal with Captrader. You can buy USD ETF from LSE. You can also buy USD ETF from US stock exchange. Just make sure the ETF fund is traded in USD and make sure you have USD in your account. You will be buying and selling from inside interactive broker page. Select ETF (stock code you want, punch in how much is your price and how many units, click preview, purchase, done. You cannot buy USD denominated fund using say GBP or EUR. Tradestation here is Tradestation global. Not the normal tradestation.

I dont know why you are making it complicated. Keep it simple. Hope you understand. Avoid etoro. Is CFD broker.

If you are a trader and can generate min commision of USD10/ month use pure interactive broker. Way way cheaper as each transaction only cost a few cents. If you cannot generate that amount of commision stick with Whitelabels.

This post has been edited by Ramjade: Aug 18 2019, 11:30 PM

FATCA is US government effort to catch their US citizens /green card holders from lari tax and/or under report or not reporting their overseas income/assets.

Nothing really to do with us...

This post has been edited by dwRK: Aug 18 2019, 11:51 PM

Now I have a clearer view.

Regarding Captrader and Tradestation, I am fine with both brokers and the fees seem low.

The thing is, I don't know how much is the commission charges for USD-denominated ETF on LSE and SIX?

The brokers only give GBP and euros for trade commissions in LSE and SIX respectively.

Does that mean that I need to pay the commissions in pounds or euros to buy USD-denominated UCITS?

Thanks for the help everyone.

Yes

Tey IB? If no money for IB can try IB whitelabels. All info is inside this thread.

For TradeStation Global the commission for USD denominated ticker is the equivalent of GBP1.50 or 0.12% whichever is higher.

For the past few buys I've been charged USD1.91 to buy an ETF via LSE.

Here is your answer. Kindly read the entire thread.