Tax obligations on US shares purchased via US brokerage.

[Aaron]

I am about to open an account with Tradestation to access the US markets at far better rates than going thru ASB. Part of the process is filling out a US IRS W8-BEN form, and now i'm wondering how much tax the US govt is going to want to take from my profits if any. Anybody have a quick rundown of the tax situation?

I'm not a trader, more a buy and hold investor, but will be purchasing a few put options and the like to hedge against general market downturns. No company or trust structure in use, just doing everything in my own name at this stage.

Thanks in Advance.

Without going into our own FIF regime etc etc I came across these W8-Bens recently in relation to business income from a US company that wanted to deduct a 30% withholding tax. Reading the W8-BEN and the double tax agreement, business income should be 0% but I have yet to hear back if they agree with me or not. In your case dividend income per Article 10 should not exceed 15% so I guess 15% is what you put on the W8-BEN assuming you are a NZ resident.

Not confident that this is right so best to check elsewhere and would appreciate it if you get back with what you find out.

[Vagabond47]

Without going into our own FIF regime etc etc I came across these W8-Bens recently in relation to business income from a US company that wanted to deduct a 30% withholding tax. Reading the W8-BEN and the double tax agreement, business income should be 0% but I have yet to hear back if they agree with me or not. In your case dividend income per Article 10 should not exceed 15% so I guess 15% is what you put on the W8-BEN assuming you are a NZ resident.

Not confident that this is right so best to check elsewhere and would appreciate it if you get back with what you find out.

Still checking this out, but on another fora this is what somebody had to say.

Our double tax agreement with America allows them to charge up to 15% withholding tax on dividends received by company domiciled in America. On your US IRS W8-BEN form you will put "Article 10 paragraph 2" in reference to the our double tax agreement with America which limits the withholding tax deducted form your dividends to 15%. This 15% withholding tax deducted can then by used to offset against your tax on taxable income at the end of the year when you go to do your tax return.If you're looking into trading options, you will need to look into the "financial arrangement rules" which govern the taxation of financial arrangements.

Might be talking to my accountant mate tonight at the pub, so i'll see what he has to say about it.