US tax law requires the withholding of tax for non-US persons (non-resident aliens) at a rate of 30% on payments of US source stock dividends, short-term capital gain distributions and substitute payments in lieu. You may be eligible for a reduced rate of withholding if there is a treaty in effect between your country of tax residence and the US, and we are able to associate the payment with a valid Form W-8. Refer to…

Background

Beginning January 1, 2017, IRS regulations will impose U.S. withholding taxes on US dividend equivalent payments to non-US persons holding derivative positions on US equities. Previously, US withholding tax was not imposed on these payments. The regulations require intermediaries, such as us, to act as withholding agents and collect US tax on behalf of the IRS. An overview of the tax, how it is determined and the products impacted is provided below…

U.S. persons holding securities issued by entities that are domiciled outside of the U.S., but which invest within the U.S. should pay particular attention to our tax withholding obligation in the event of a distribution by the issuer. These entities, which may include Canadian unit trusts, REITS, limited partnerships or other common shares, often distribute dividends and/or interest based on both the U.S. and non-U.S. sourced income. While U.S. persons reporting a valid taxpayer ID number on their Form W-9 are generally exempt from backup withholding on U.S. sourced income, the nature of the custodial arrangement for these particular securities is such that U.S persons may be subject to a withholding tax calculated at a fixed rate of 30% on that portion of the distribution associated with the US-sourced income. This is in addition to any withholding required to be applied to the non-U.S. sourced portion of the distribution as required by the relevant foreign taxing body…

In general, amounts withheld for US taxes are non-refundable. However, under certain circumstances, such as an incorrect rate being applied to withhold tax, a refund can be obtained. If you are an individual, file either Form 1040NR, "US Nonresident Alien Income Tax Return" or 1040NR-EZ "U.S. Income Tax Return for Certain Non-Resident Aliens with No Dependents" to obtain a refund. There are similar US forms for trusts and corporations. IRS Publication 515 "Withholding of Tax on Non-Resident Aliens and Foreign Entities" and IRS Publication 519, "US Tax Guide for Aliens", available free at …

In the event an account holds a dividend paying depository receipt, at the time of the dividend payment taxes will be withheld. In several jurisdictions, we are unable to efficiently comply in an electronic, straight-through manner with the required beneficial owner disclosure requirements. As such, dividends on depository receipts where full beneficial owner disclosure is required in order to receive beneficial tax treatment will be withheld at the maximum tax rate applicable…

Foreign stocks listed for trading in Japan which issue dividends will have the cash dividend allocation subject to an increased withholding tax rate. The tax will vary based on the domicile of the stock issuing the dividend; however in general the withholding rate will be the highest withholding rate applicable and will not incorporate a reduction based on prevailing tax treaties…

The amount of foreign tax withheld from dividends is reported on Form 1099-DIV. The IRS does not require reporting of foreign tax withheld on gross proceeds and substitute payments in lieu. Refer to IRS Publication 514…

We will report ROC distributions to shareholders as nontaxable distributions on Form 1099-DIV, "Dividends and Distributions". Please note that this information is often not available until after the initial 1099 forms are made available to you. Once the information is available we will issue corrected 1099s to you. We suggest that you check your tax forms in Client Portal > Reporting > Tax Forms prior to filing your return to verify that you have used the most current information…

Return of Capital (ROC) is a distribution paid to fund shareholders in excess of a fund's current and accumulated earnings and profits. An ROC distribution is generally nontaxable and reduces a shareholder's cost basis in the investment. If an ROC distribution exceeds a shareholder's cost basis, then any additional amount is treated as a capital gain…

We remit the tax withheld to the U.S. Treasury.

Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor…

Section 881 of the US tax code imposes a 30% tax on the gross amount of US source fixed or determinable, annual or periodical (FDAP) income derived by a foreign corporation that is not effectively connected with the US business. Sections 1441 and 1442 require any person making a payment of FDAP to a nonresident alien (or foreign corporation) to withhold tax equal to 30% (unless the withholding rate is reduced pursuant to a provision of the tax code, the tax treaty or if the income is effectively connected with a US trade or business)…

Tax-exempt interest dividends from mutual funds is reported on Form 1099-INT (box 8).

Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor…

If federal income tax withholding is applied to your conversion, state income tax may also apply. If a minimum percentage amount applies, withholding will be set at the greater of the minimum state tax or the amount you specify. Depending upon the state you live in, state income tax withholding may be required. You may also elect not to have state tax withholding apply or you may elect to increase the rate of state withholding above your state’s minimum percentage amount. Consult your tax advisor…

We remit the tax withheld to the US Treasury Department.

Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor…

Beginning January 1, 2017, new IRS regulations imposed U.S. withholding taxes on US dividend equivalent payments to non-US persons holding derivative positions on US equities. Previously, US withholding tax was not imposed on these payments. The regulations require intermediaries, such as us, to act as withholding agents and collect US tax on behalf of the IRS…