US Withholding Tax on Stocks?

Hello,

I am Swiss and am considering opening an account with Ameritrade in the US in order to take advantage of the lower costs and more trading options. Right now, I have custody accounts at UBS and Swissquote.

Just to test it out, I tried opening an Ameritrade account and saw that I have to complete a W-8BEN form for the US tax authorities and submit this along with my account application.

The country I live in has to be stated on the form, and it says that my information will be exchanged with that country.

These are my questions:

In Switzerland, stocks are taxed as wealth (and have to be declared as wealth in tax returns).

• Does that apply in exactly the same way when my broker is in the US?
• Do I have to pay tax in the US as well? If so, what does that process involve?
• Which information will be exchanged (if information is exchanged)?

Thank you for your reply. It would be helpful to know what I am getting into.

I imagine other users may have the same question.

Money generated by dividends on US stocks is subject to a 30% US withholding tax. This is reduced to 15% as per the tax treaty between the United States and Switzerland when the Swiss tax resident submits the required form (W-8BEN) to the US Internal Revenue Service.

The remaining 15% US withholding tax can be reclaimed by submitting an R-US 164 form and a DA-1 form to the Swiss tax office along with your tax return.

Hi,

Anybody with experience selling US shares through an online broker like Degiro?

Do you know if a withholding tax (like the one for dividends) is applied when you sell US stocks (for non-US citizens living in Switzerland)?

Hi paipor

I have no personal experience with it, but I am quite sure: Withholding tax only applies to income such as interest or dividends. If you sell US shares through Degiro, you do not have to pay any taxes (exception: the Swiss tax authorities consider you a professional trader).

Note: When you sell shares Degiro charges you a transaction fee (brokerage) and stock exchange taxes are also payable.