# W8-BEN question



## LionMG (Dec 21, 2012)

I have a TFSA with TDW, and I hold US dividend paying security in it. It is my understanding that I have to fill out a W8-BEN form to reduce the withholding tax from 30 to 15%. I'm a beginner to investing, so I'm going off research from the internet. 

No one I've spoken to so far at TD believes this is possible. In branch I was given a crazy look for asking them to print out the form. Now, 3 weeks later I called TDW general inquiries to confirm they have my W8-BEN on file. They didn't receive it from my branch, and the rep told me that I cannot use a W8-BEN to reduce my withholding tax on US dividends - it's for US residents only. I tried to explain otherwise, but he didn't believe me. 

Are they just misinformed, or have I researched incorrectly? 

Thanks!


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## Eclectic12 (Oct 20, 2010)

From a purely technical perspective, the rep is mis-informed.

But it may not matter as the form itself allows parties other than the beneficial owner to sign the form on the beneficial owner's behalf. So if TDW's procedures have already registered a W8-BEN on your behalf when the account was setup, the rep might be looking for a form signed by you that does not exist or they don't have access to. 

Anyone know the procedures for sure? 

The only W8-BEN form I can recall filling out was for a DRIP & SPP directly from the US company.

http://www.irs.gov/pub/irs-pdf/fw8ben.pdf


Proof would be to check the dividends reported by the US company, factor in the currency exchange and see how much less the paid dividends are from the reported dividends.


Or you might call and ask what happens on account setup, explaining that you want to confirm before buying a US dividend paying stock what the IRS withholding tax will be.


Cheers


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## mrPPincer (Nov 21, 2011)

I asked about W8-BEN when I was setting up my TDWH accounts and they said I shouldn't need to fill one out unless I was american or a dual citizen. They said having a registered account was proof enough that I was a Canadian.
I did give them a filled out W8-BEN form just to be sure.


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## Argonaut (Dec 7, 2010)

I've dealt with this a number of times as a dual citizen. The W8 form is for Canadian citizens _only_ to reduce withholding tax from 30% to 15%. Dual citizens _cannot_ fill out this form under penalty of perjury. The correct document for dual citizens is the W9 form. The caveat is I then have to file taxes with the IRS. Unless I'm making a whole pile of money I won't have to pay them anything though.

I'm surprised Waterhouse, or at least some of the reps, don't have their cards in order on this one. Other brokers seem to know the deal.


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## CanadianCapitalist (Mar 31, 2009)

AFAIK, you do not have to file a W8-BEN with most Canadian brokerages. You would have submitted a copy of your driving license along with your application. That should be enough to record you as a Canadian resident. 

The only time I got nailed was when I had an account with Questrade. Questrade incorrectly classified me as something other than a Canadian resident. So, US withholding taxes in a non-registered account were 30% instead of 15.


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## Argonaut (Dec 7, 2010)

What is most? You have to with RBC, Questrade, and Interactive Brokers. These are the only brokers I've dealt with.


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## AltaRed (Jun 8, 2009)

Argonaut said:


> What is most? You have to with RBC, Questrade, and Interactive Brokers. These are the only brokers I've dealt with.


And Scotia iTrade. I cannot imagine a broker NOT wanting a W8-BEN on file (excepting of course you have no intention of having US domiciled securities in your account).


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## Eclectic12 (Oct 20, 2010)

AltaRed said:


> And Scotia iTrade. I cannot imagine a broker NOT wanting a W8-BEN on file (excepting of course you have no intention of having US domiciled securities in your account).


As I say, I filled out a lot of paperwork to open my TDW account and I would have remembered filling out a W8-BEN as it's clearly an IRS form.

I'm sure the legalese grants TDW the right to act on the individual's behalf so I see no reason TDW can't be signing off on the W8-BEN directly with the IRS. Maybe I'm thinking there more common sense involved than there is.


Perhaps some who have opened account recently can recall if they filled one out and post here?


Cheers


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## CanadianCapitalist (Mar 31, 2009)

Argonaut said:


> What is most? You have to with RBC, Questrade, and Interactive Brokers. These are the only brokers I've dealt with.


TD Waterhouse, RBC Direct and Scotia iTrade. I don't recall ever filing a W8-BEN with any of them. The only ones I clearly recall filing a W8-BEN were Ameritrade Canada and E*Trade. The first offered US market only trades and E*Trade was a company stock account.


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## Sampson (Apr 3, 2009)

RBC DI has sent me and my wife forms to fill out in the past.


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## kcowan (Jul 1, 2010)

Can anyone report actual experience with US dividends in a TFSA that withholds 30%?


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## Eclectic12 (Oct 20, 2010)

kcowan said:


> Can anyone report actual experience with US dividends in a TFSA that withholds 30%?


Not directly ... though the article on the internet that pointed out that the TFSA was not exempt from US withholding reported that a few customers had 30% withheld (like CC's non-registered account) as they were not recorded as Canadian residents.

I suspect it's a blanket setup for the accounts so if the non-registered is setup incorrectly by the broker, than a TFSA is likely also setup incorrectly. *Edit:* For the brokers that are not requiring a W8-BEN be filled out.

Bottom line seems to be that it is a rare occurrence but something well worth checking.


Cheers


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## Argonaut (Dec 7, 2010)

CanadianCapitalist said:


> TD Waterhouse, RBC Direct and Scotia iTrade. I don't recall ever filing a W8-BEN with any of them. The only ones I clearly recall filing a W8-BEN were Ameritrade Canada and E*Trade. The first offered US market only trades and E*Trade was a company stock account.


RBC DI is quite adamant about the W8 form. They sent me a letter saying they would change my account status to sell-only if I did not complete one. I told them I could not, and as I also couldn't fill out a W9 at the time, I sold everything and left. I remember doing calculations on my dividends, and it was 30% withholding tax. This was all late 2010, early 2011. Another poster mentions Scotia iTrade wanting one. So what do TD Waterhouse customers get charged on their dividends?


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## AltaRed (Jun 8, 2009)

Argonaut said:


> RBC DI is quite adamant about the W8 form. They sent me a letter saying they would change my account status to sell-only if I did not complete one. I told them I could not, and as I also couldn't fill out a W9 at the time, I sold everything and left. I remember doing calculations on my dividends, and it was 30% withholding tax. This was all late 2010, early 2011. Another poster mentions Scotia iTrade wanting one. So what do TD Waterhouse customers get charged on their dividends?


The default is 30% withholding without a W8-BEN. For Canadians filling out a W8-BEN, do not include your ITIN or SSN if you have one. It is optional anyway. The issue is that if you do have a SSN because of ex-pat work you may have done in the USA in the past, places like RBC DI will NOT accept a W8-BEN because of that. They insist on a W9 which of course is wrong for a Canadian (not dual US) citizen residing in Canada. There is no choice but to take your business elsewhere and to then remember to fill in the W8-BEN without the ITIN/SSN box filled out. This is all CYA on the brokers part of course, but they carry the ultimate responsibility based on the long extra-national arm of the IRS.


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## PuckiTwo (Oct 26, 2011)

*TDWaterhouse*: 
go www.TDWaterhouse.ca. > click TD Direct Investing > scroll down page to "Forms and applications" > click "Update your account" > scroll up page to "Investment Account" . 2nd last is W-8BEN > click and gives you the form and instructions.

Thks for bringing this issue up - we haven't filled out those form either.


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## Saniokca (Sep 5, 2009)

kcowan said:


> Can anyone report actual experience with US dividends in a TFSA that withholds 30%?


Yep, my December MCD dividends were taxed at 30%. This is what the description said: "MCDONALDS CORP CASH DIV ON 50 SHS REC 12/03/12 PAY 12/17/12 NON-RES TAX WITHHELD"

I called questrade and they said that I need to fill out the w8-ben form. Hopefully the February dividends will be taxed at 15%.

They should really make you fill out either the w8-ben or the w9 form when you open the account...


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## leoc2 (Dec 28, 2010)

Here is what I asked BMO Investorline using online message linked to my non registered account--


> If I purchase VTI (Vanguard US domicile ETF) do I need to fill in a W8-BEN form to reduce the withholding tax from 30% to 15%?


Here is their response --


> Thank you for contacting BMO InvestorLine using MyLink. My name is Perry and I appreciate the opportunity to respond.
> 
> Your account is coded that we received the IDs for Canada US Tax purpose. As such, you will be subject to 15% Non Resident Tax only on US income.
> 
> Please feel free to contact us if you have any other questions or comments. Thank you for choosing BMO InvestorLine, we appreciate your business.


Should I worry about the accuracy of the reply?


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## AltaRed (Jun 8, 2009)

leoc2 said:


> Should I worry about the accuracy of the reply?


I wouldn't at this time. But watch your account to see if 15% or 30% was withheld on US income, and then chase them with a W8-BEN. I don't know what ID you used when you opened your account, but if it was a photocopy of your passport page and your DL, that would give them enough confidence to code it that way. A DL by itself is not good enough (could be an American ex-pat on assignment in Canada).


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## Eclectic12 (Oct 20, 2010)

kcowan said:


> Can anyone report actual experience with US dividends in a TFSA that withholds 30%?





Saniokca said:


> Yep, my December MCD dividends were taxed at 30%. ...
> I called questrade and they said that I need to fill out the w8-ben form. Hopefully the February dividends will be taxed at 15%.
> 
> They should really make you fill out either the w8-ben or the w9 form when you open the account...


Interesting ... still nothing for the TFSA front.

I did notice that on the Investment Income Summary for my TDW cash account is reporting foreign income with a separate line item listing "US Non-Resident tax withheld" for each payment. The numbers calculate out to 15% withheld by the IRS.


Cheers


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## kcowan (Jul 1, 2010)

Yes they have always shown that as a separate line for US stocks and it is always 15%. I suspect the same will be true for TFSAs.


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