Who is subject to the dividend equivalent withholding tax?

While an account holder who has submitted a Self-Certification of Tax Residencies (Substitute W-8BEN, classifying them self as a non-U.S. person) is not subject to a U.S. capital gains tax or withholding on trading profits (will be subject to the tax rules of their country of origin), they are subject to U.S. withholding taxes on U.S. source income. U.S. source income includes dividends and…

Overview:

Income payments (dividends and payment in lieu) from U.S. sources into your account here may have U.S. tax withheld. Generally, a 30% rate is applied to non-U.S. accounts. Exemption from the withholding or a lower rate may apply if your home country has a tax treaty with the U.S. Complete the applicable Form W-8 to find out your status…

Dividends paid on U.S. stocks will be subject to withholding taxes for non-residents. A completed W8 form will allow for a reduced tax rate if a treaty exists between the United States and the holder's country of taxation; however a valid W8 only allows for a reduction in the tax rate not an elimination of the tax entirely…

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…