Does security's exchange location matter for tax?

B

basilbrush

Registered User
Messages
192
If I buy an Irish domiciled security on a foreign exchange, does it have foreign tax implications? For example, if I buy shares in CRH on the London stock exchange, or an Irish government bond listed on an exchange in Italy, is there any difference compared to if I bought them on the Irish exchange? If I bought shares in a German company on a German stock exchange I think I would have to pay annual taxes to the German government, or at least have prove to them that I am an Irish resident, but if it was instead an Irish company would I only have to pay Irish taxes, and have no interaction with the government of the exchange location, the same as if I had bought it on the Dublin stock exchange?
 
I have Perrigo shares. These are listed in USA but Perrigo is headquartered in Ireland for tax. They are held at Degiro and Interactive Brokers. Only the Irish witholding tax is deducted from the dividends.
 
S class said:
I have Perrigo shares. These are listed in USA but Perrigo is headquartered in Ireland for tax. They are held at Degiro and Interactive Brokers. Only the Irish witholding tax is deducted from the dividends.
Click to expand...
In the case of the US, I presume that you have filed a W-8 BEN?

About Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals) | Internal Revenue Service

Information about Form W-8 BEN, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities), including recent updates, related forms and instructions on how to file. Submit Form W-8 BEN when requested by the withholding agent or payer.
www.irs.gov www.irs.gov
 
From what I have read so far, it seems like once the transaction has completed, the exchange is irrelevant, and that it is indeed just the source country (location of company/country that the shares/bonds were issued by) that matters. The Perrigo shares on the NYSE seem to have the same Irish ISIN as Perrigo shares trading on European exchanges.
 
I also have Seagate. These are listed on Nasdaq and are tax domiciled in Ireland.
They also have Irish 25% withholding tax.
 
ClubMan said:
Sorry, I thought that you had bought the shares on a US exchange. My mistake.
Click to expand...
Yes I did buy these shares on the US market. The W8 BEN is of no benefit for the shares as US tax is not deducted from them. Only Irish retention tax applies.
 
I wonder how many people have bought shares in companies like Accenture and Medtronic on the NYSE and been surprised that they have bought an asset based in Ireland, subject to Irish taxes. At least for Americans I think their brokerage firm will probably automatically fill out the Irish equivalent of the W-8 BEN for them, in which case it seems that Ireland doesn't withhold any taxes, so they might not even know it, but others might not be so lucky. I previously thought that foreign companies wishing to list in America had to do so through depository receipts, but it seems that it must be possible to directly list there.
 
You must log in or register to reply here.
Back
Top