The tax treaty the United States has with your country determines the tax withholding rate for international customers when receiving any source of income. The withholding rate generally affects any sources of income, namely dividend or interest payment made to the account, rather than profits made from trades. Any withheld taxes withheld deduct immediately upon payment to the account. This deduction lists as a line item in the History tab, as illustrated below.
Example of taxes withheld from a dividend paid to an international account.
How is my tax withholding rate determined?
Your W-8BEN determines the withholding rate assessed on your account. A W-8BEN is submitted on your behalf when you open a tastytrade account. However, if you believe the withholding rate applied to your account is incorrect, you will need to re-submit a W-8 BEN to our accounts team. Please send your W-8 BEN that specifies your specific tax rate to our accounts team at email@example.com.
For accounts with dividend reinvestment applied (DRIP), the total reinvestment amount will base on the dividend after the withholding. To learn more about DRIP, please click here.
To look up the US tax treaty with your country please visit the IRS website by clicking here. For more information about the W-8 BEN, please click here.