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.
This treatment is due to the tax reporting status of our clearing agent. As our clearing agent is unable to process the relevant tax declaration documentation which would allow for the application of tax withholding at a reduced rate, shareholders will be subject to the highest rate.
In order to avoid the application of the tax withholding on the dividends of foreign stocks, positions in such dividend paying stocks should be closed prior to the ex-dividend date.
We recommend that clients consult with their tax advisor for assistance in determining the eligibility, if any, for a tax credit on this withholding.
A list of foreign stocks and their applicable rates is provided below. Please be aware that the below is for informational purposes only and may not include all stocks which may be subject to the higher withholding rates.
| Stock Code | Stock Name | Dividend Tax Rate |
| 9399 | Xinhua Finance Limited | N/A |