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Interactive Options Course
Lesson 1 of 6
It is, almost illogically, easier to define who is a non – US person backwards. The US has a unique taxation structure that taxes its citizens, Green Card holders and residents regardless of what country they live in. US taxes will apply to the first US Citizens to reside on the moon and they will need to file. A closer to home example is a US Citizen living in France. In addition to having French tax to file and pay, the US citizen would also have US taxes to file.
Non-US citizens, non- residents and people without green cards are non -US persons. As stated before, if a person is a US citizen, they are always considered a US Person. Their residency has no bearing. Persons who are legal residents of the US have different status depending on what type of residency they hold. If a person is a holder of a US Green Card – they are, for US Tax purposes, treated as if they are a US citizen. So, just like US citizens, they are subject to US tax regardless of residency.
US residents here on work or other temporary visas are, with some exceptions, treated as US persons subject to US tax. Once you leave the US the rules are complex requiring an averaging of days in the US over a 3-year period. For the purposes of this program I will not deal withleaving the US and assume that visa holders are US residents.
A good reference in this area is IRS Publication 519. Students and educators in the US on an F-1 visa are considered as continuing to reside in their home country and are non – resident, despite their presence in the US.
Employees of world organizations, such as the UN or World Bank and employees of other governments, such as embassy workers are not considered resident in the US and are treated as non-US persons.
Dealing only with individuals for the purpose of this program: Non-US persons must complete a form W-8BEN. This document identifies your tax status for the US.
You must provide your:
Part II of the form establishes eligibility for treaty rates if you are a tax resident of a country that has a tax treaty with the US. We will discuss tax treaties in detail in another lesson.
W-8BENs must be redone and resubmitted to any US entity holding your account or generating income to you if you have any change in circumstances – for example if you move – even if you move within the same country.
W-8BENs are good for 3 years from the date of signing.
W-8BENs expire on 12/31 of the third year and must be updated before that date to avoid withholding at higher rates and on additional items of income.
If you have a US taxpayer ID W-8BENs do not expire, however, they must be updated for any change in circumstances.
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The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
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So, if I am not a US-Resident but I do want to create an account with IBRK in USA and operate with USA dollars, I have to fill the W8-Bens but what happen when I go back to my home country and I still wanna keep operating but in EUR?
Hello, thank you for reaching out. We appreciate your interest in IBKR!
The entity of your account will depend on your country of legal residence. If you are interested in opening an account, please use this link: https://spr.ly/OpenAccountfromIBKRCampus
If you relocate to a different country, you will be able to retain your account as long as you are not moving to a country that IBKR is prohibited from transacting business in due to government sanctions.
However, even if relocating to a permissible country, you may be required to initiate a new application and request a manual transfer of eligible assets once your new application has been approved. Whether this step will be required depends upon the country you were residing in and the one that you are moving to as IBKR maintains multiple entities each of which has been formed to carry client accounts based upon local regulatory requirements and IBKR policies. You would need to contact your local Client Service Center to determine if your particular situation requires opening a new account.
Also, it is possible to change your base currency at Interactive Brokers. Please view this FAQ for instructions: https://www.ibkr.com/faq?id=28227469
Please reach back out with any additional questions. We are here to help!
Thanks for the information! As a U.S. citizen who is resident in the UK using IBKR, what is the implication for moving back to the U.S. if I was invested in U.S.-based ETFs? Would my account and ETFs be transferable to IBKR-U.S.? And would this be done in a way without liquidation and forcing a taxable event?
Thank you for your question. If you relocate to a different country, you will be able to retain your account as long as you are not moving to a country in which IBKR is prohibited from transacting business due to government sanctions. Even if relocating to a permissible country, you may be required to initiate a new application and request a “full account manual transfer” of eligible assets once your new application has been approved. Whether this step will be required depends upon the country you were residing in and the one that you are moving to as IBKR maintains multiple entities, each of which has been formed to carry client accounts based upon local regulatory requirements and IBKR policies. If a new application is not required, IBKR will update your country information on your behalf. We hope this helps!
Hello, I am a bulgarian , living in Bulgaria, European Union country. Can I open an options trading account with IBKR for trading US options on indexes and stocks like SPY, QQQ, IWM ,AAPL, TSLA, NVDA etc. ?
Hello, thank you for asking and we appreciate your interest in IBKR! Yes, it is possible to trade US options in Bulgaria. If you are interested in opening an account: https://spr.ly/OpenAccountfromIBKRCampus
You must request trading permissions to trade specific products and in specific regions. IBKR grants permissions based on your financial profile (e.g. age, liquid net worth, investment objectives, product knowledge and prior trading experience) and sometimes where you are located. Please note that we cannot disclose the requirements needed for specific trading permissions.
You can view and manage your permissions any time here:
https://ndcdyn.interactivebrokers.com/sso/Login?action=TA_TRADE_PERM_BETA
For more information on Options levels 1-4, please visit
https://ibkr.info/node/4860
Please reach back out with any additional questions. We are here to help!
Hi. The investor’s residency is in Israel, interested in investing in Australia with AUD. The currency currently in possession is AUD. I understand as residency being Israel the investor would be under the US entity. However, since the investment will be in Australia only, would the investor be subject of US taxes, such as estate tax?
Thank you for contacting us. IBKR does not provide any tax advice. Please consult a tax professional who specializes in your region regarding specific questions.
Hello, I have IBKR account for 3 years and i am dont live or have stayed in US for longer of half year in my whole life. As i am aware i am non us alien, I wanted to know do I need to file tax return even if dont owe any taxes as capital gain taxes are not taxed for non residents?
Hello, thank you for reaching out. IBKR does not provide tax advice. Please consult a tax professional who specializes in your region regarding specific questions.
Hellp, if we partners are from the EU but the company is in America and it is an LLC, can I still open the account on your broker by filling out each form correctly?
Hello, thank you for reaching out. The IBKR entity through which an account is carried is generally based upon the account holder’s country of legal residency or, in the case of an entity, its country of formation.
May I ask if I’m US citizen but not a US-Resident, am I eligible to open an IBKR account without a US address (As I live outside of US and do not have an US address)?
Hello LT, we appreciate your interest in opening an account at IBKR! Yes,you can open an account from Saudi Arabia. We are pleased to offer our services to clients in 200+ countries and territories; you can find our complete availability on our website: https://spr.ly/AvailableCountriescampus
If you are ready to apply for an account, please visit: https://spr.ly/OpenAccountfromIBKRCampus
Ciao, sono italiano e ho sbagliato a compilare il W8BEN. Ho pagato tasse del 30% in USA poi ho corretto il modulo specificando di essere italiano. È possibile avere indietro i soldi non dovuti? Refund? Thanks
Salve, grazie per averci contattato. Si prega di notare che non possiamo fornire consulenza fiscale, ma questa pagina web potrebbe esserti utile: https://spr.ly/IBKR_TaxInfoForum
Abbiamo anche una sezione FAQ su tasse e moduli fiscali: https://spr.ly/IBKR_FAQscampus
Consulta un professionista fiscale specializzato nella tua regione per domande specifiche.
Hello, I am a US citizen but living in Asia, therefore I do not have a US permanent address but only an oversea address. Can I still open an IBKR account and trade for US ETFs?
Hello Lawrence, thank you for asking. Yes, with the proper trading permissions, clients in Asia can trade ETFs. You must request trading permissions to trade specific products. IBKR grants permissions based on your financial profile (e.g. age, liquid net worth, investment objectives, product knowledge and prior trading experience) and sometimes where you are located. Please note that we cannot disclose the requirements needed for specific trading permissions. You can easily view and manage your trading permissions any time in Client Portal:
https://spr.ly/IBKR_TradingPermissions
Hi, I am currently considered a US person (non-US citizen on a temporary employment visa). If I leave the US in the next year, will I be able to open an IBKR account in my home country and transfer my stocks there?
Hello, thank you for reaching out. Generally, if you relocate to a different country, you will be able to retain your account as long as you are not moving to a country that IBKR is prohibited from transacting business in due to government sanctions.
However, even if relocating to a permissible country, you may be required to initiate a new application and request a manual transfer of eligible assets once your new application has been approved. Whether this step will be required depends upon the country you were residing in and the one that you are moving to as IBKR maintains multiple entities each of which has been formed to carry client accounts based upon local regulatory requirements and IBKR policies. You would need to contact your local Client Service Center to determine if your particular situation requires opening a new account. https://spr.ly/IBKR_ClientServicesCampus
We hope this information is helpful!
i am a US citizen living outside the US. i have a primary tax residency in my country of residence. do i need to put an additional tax residency (the US) on my application? thx, randi
Hello, thank you for reaching out. For instructions to correct your citizenship information, please review this FAQ: https://www.interactivebrokers.com/faq?id=38468116
We hope this helps!
Hello, I’m a non-citizen alien in the USA with a work visa. Now I’m moving back to my home country. I have stocks in my US IBKR accounts and I want to relocate my legal residency to my home country. I also have an IRA account with IBKR USA. Would you please help me with the process of relocating these accounts to my home country? Thank you.
Hello, thank you for asking. IBKR operates as an international broker, so unless an existing client relocates to a country where we are prohibited, by regulation, from doing business, there should be no problems with continuing your relationship if you move. Your country of legal residency is a key factor in determining the IBKR entity with which their account is maintained. As a result, the possibility exists that the account will need to be transitioned to a new IBKR entity, thereby necessitating the opening of a new application after which balances will be transferred and the current account closed.
Moving to a new country may subject the client to different local regulations which, among other things, may impact the products you can trade. For example, U.S. regulations generally prohibit residents from trading non-U.S. securities options. Similarly, European regulations prohibit residents classified as Retail from trading certain packaged products such as ETFs where the issuer elects not to publish the required disclosure documents.
Tax withholding rates on dividends are generally based upon the client’s country of residency and the relocation to a new country may expose the client to withholding taxes that they were previously not subject to or withholding at a rate higher than that subject to previously. For more information, please review: https://www.interactivebrokers.com/faq?id=109010834
We hope this information is helpful!
Thank you so much for the detailed information. Follow up question is on IBKR mobile app. I use this app for authentication. During transition I may have to access both US account and the account in my home country. How do I authenticate my accounts in different countries with single IBKR mobile app. Please guide me if there’s any other way to authenticate. Thanks again.
Hello AR, thank you for reaching out. You can link your multiple accounts under a single username and password, including accounts that are managed by an Advisor or a Broker. Once these accounts are linked, you will be able to access Trader Workstation, IBKR mobile solutions and Client Portal for any of the linked accounts using a single username and password. For instructions to link accounts, please review this FAQ: https://www.interactivebrokers.com/faq?id=65997390
We hope this helps.
I have an IBKR account in the US, what would happen to my account and trading options if I were to move permanently to Italy? Thank you
Hi, I am a Canadian tax resident and received a Form 1042-S. I understand that this 1042-S form reports Foreign Persons’ U.S. Source Income Subject to Withholding. Is this income reported on the T5 or T3 slips issued by IBKR already? Therefore, 1042S is for information only, right?
Hello, thank you for reaching out. The 1042-S tax form is a document used to report a foreign person’s U.S. source income that is subject to withholding. In general, foreign persons who do not have U.S. source dividend or interest income will not receive a 1042-S form. Please view this FAQ for more information: https://www.interactivebrokers.com/faq?id=64161568
Please note that IBKR does not provide tax advice, but you may find this webpage helpful: https://spr.ly/TaxInfocampus
Please consult a tax professional who specializes in your region regarding specific questions.
I have a LLC, sole membership, living as tax resident in Thailand. I also have an EIN number. Can I open a trading account? If yes, do I need to consider something special during the application process? Do I need to file the W-8BEN? Thank you in advance.
Thanks so much for your interest in opening an account! To get started, please visit: https://spr.ly/OpenAccountfromIBKRCampus
Yes, you can open an account from Thailand. We are pleased to offer our services to clients in 200+ countries and territories; you can find our complete availability on our website: https://spr.ly/AvailableCountriescampus
IRS Form W-8 is used to certify your status as a non-U.S. taxpayer. It is also used to claim reduced tax withholding on dividends and other income paid with respect to U.S. securities. Without proper documentation, brokers may be required to impose exceptional withholding tax on transactions occurring in the account and/or report the account as non-compliant to tax authorities. Please view this FAQ for more information:
You can review all the available account types based on your country of legal residence here: https://spr.ly/Configurecampus
You can review our detailed application requirements here: https://spr.ly/AppReqscampus
We’re glad to help with any general questions along the way. You can also find helpful info in our FAQ: https:// ibkr.com/article?id=28216814. Don’t hesitate to reach out — we’re here for you!
Could you comment on estate tax for US non-residents. It is said that US non-residents should pay tax from assets above $60K (US residents are allowed not to pay estate tax on assets below $13990k). In other words, if one die with more than $60K in “US-situs assets”, than such assets will get hit by a hefty tax on US non-resident inheritor (up to 40% over $1 million).
Hello, thank you for reaching out. Please note that we cannot provide tax advice. Please consult a tax professional who specializes in your region regarding specific questions.
Hi, I opened my IBKR account in Australia and now have moved to USA on L2 visa. Is it a good choice to open a new IBKR account for USA and operate OR change existing account? I will be moving back to Australia after few years.
Hello, thank you for reaching out. If you relocate to a different country, you will be able to retain your account as long as you are not moving to a country that IBKR is prohibited from transacting business in due to government sanctions.
However, even if relocating to a permissible country, you may be required to initiate a new application and request a manual transfer of eligible assets once your new application has been approved. Whether this step will be required depends upon the country you were residing in and the one that you are moving to as IBKR maintains multiple entities each of which has been formed to carry client accounts based upon local regulatory requirements and IBKR policies. You would need to contact your local Client Service Center to determine if your particular situation requires opening a new account. https://spr.ly/IBKR_ClientServicesCampus
Buenas tardes
soy un N.R.A. con cuenta en U.S.A. si me retienen el 30% por ganancia de capital por operaciones con opciones sobre acciones y tengo w8-ben, ya con la retención ustedes se encargarían de informar al IRS o debo sacar el itin y declarar?. Gracias.
Hola, gracias por contactarnos. Si no reside en EE. UU., se le solicitará que presente el Formulario W8 durante la solicitud. Este indicará su país de tributación y, si no es EE. UU., no estará sujeto a impuestos estadounidenses sobre sus ganancias comerciales.
Sin embargo, prácticamente todos los países aplican retenciones de impuestos sobre los dividendos pagados por corporaciones locales a no residentes. La tasa predeterminada es del 30 %, aunque puede ser menor si existe un tratado fiscal internacional con su país. Consulte estas preguntas frecuentes para obtener más información: https://www.interactivebrokers.com/faq?id=25487889
Tenga en cuenta que no podemos ofrecer asesoramiento fiscal, pero esta página web puede resultarle útil: https://spr.ly/TaxInfocampus
Consulte con un asesor fiscal especializado en su región si tiene alguna pregunta específica. ¡Esperamos que le sea útil!
Is an EU or UK based US citizen allowed to buy ETFs in an US account such as those on the US domiciled UK tax compliant list
Hello Andrew, thank you for reaching out. Issuers of U.S. listed ETFs do not as a rule create Key Information Documents (KIDs). This means that EEA and UK Retail clients cannot purchase the product, according to the Packaged Retail and Insurance-based Investment Products Regulation – EU No 1286/2014. IBKR is required to block trading in a PRIIP if a KID is not available. Clients nevertheless have several options:
1. Many US ETF issuers have equivalent ETFs issued by their European entities. European-issued ETFs have KIDs and are therefore freely tradable.
2. Clients can trade most large US ETFs as CFDs. The CFDs are issued by IBKRs European entities and as such meet all KID requirements.
3. Clients may be eligible for re-classification as a professional client, for whom KIDs are not required.
In case you are interested, you can review this knowledgebase article for more details: https://www.ibkrguides.com/kb/article-2993.htm
In the future, you can see which products have KIDs in Client Portal: https://ndcdyn.interactivebrokers.com/sso/Login?action=CS_PRIIPS
You can view and manage your trading permissions anytime in Client Portal: https://spr.ly/IBKR_TradingPermissions
To trade certain products or in specific regions, you’ll need to request permissions. These are based on your financial profile (e.g., age, experience, net worth, objectives) and sometimes your location. Please note we can’t share the exact requirements for each permission. We hope this helps!
Is there any capital gain tax on futures trading for non-US citizens non-US residents?
If I am an EU citizen working in the US on a green card, open a US Interactive Brokers account, and then later decide to give up the green card, what changes would I have to make to my account after giving up the green card? Any new forms required, etc.? Thank you.