W-8 FORMS: FAQ

If you are trading instruments issued by a US issuer, be it corporate or a government, it is crucial to grasp the ins and outs of the US tax system. 

How can I qualify for a reduced US tax rate (if applicable)?

The applicable tax rate is determined based on your tax residency, as specified in the respective tax treaty agreement and the specific terms outlined in the relevant tax treaty agreement. In order to obtain a reduced tax rate, you need to provide EXANTE with a valid W8 form. 

How long does a W8 form remain valid?

A W8 form remains valid for 3 years. 

Is the tax rate on coupons dependent on my tax residency?

No, the tax rate for coupons is taxed at 0% if you qualify for the portfolio interest exemption and have a valid W8 form. Your tax residency does not impact this rate.

When does EXANTE apply the tax rate specified in the W8 form?

EXANTE begins applying the tax rate specified in your form after the date when you submitted the valid form.

How does EXANTE handle my taxes at year-end?

At the end of each year, EXANTE considers the most recent valid W8 form and recalculates all taxes for that particular calendar year, based on the information provided in the form.

When can I expect to see the tax recalculation reflected in my account?

The result of your tax recalculation, be it a reimbursement or an additional charge, will be posted to your client account no later than the end of May in the following tax year. For example, tax calculation for the year 2023 will be applied to your account by the end of May 2024. 

Can I request EXANTE to retroactively recalculate taxes for the current year?

Yes! If you have submitted a valid W8 during the year and wish to have taxes retroactively recalculated for the ongoing year, you can make a request to your account manager. Keep in mind that this recalculation only affects income sources such as coupons, dividends, and partnership distributions for the current year. The cost of this service amounts to 90 EUR.

As a foreign Qualified Intermediary (QI) to the IRS, we are obliged to collect W-8 forms ("Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting") from all clients who can potentially receive US source income in the form of dividends, coupon payments or other fixed, determinable, annual or periodic (FDAP) income.

To avoid a maximum 30% tax on dividends, the clients have to present their W-8 forms to EXANTE. If the client is from a country that has a tax treaty with the US, they will be paying less than 30%. Therefore, in order to be eligible for a lower tax rate, the client must disclose their country of tax residence.

As a financial intermediary and according to terms of business, Exante acts as a tax agent for its clients. This implies that Exante is entitled to collect taxes from the income generated by its clients and perform tax payments in the name of its clients to respective tax authorities. XNT and EXT have acquired Qualified Intermediary (QI) status from the IRS (US tax authority), thus granting the company the ability to conduct the given procedure.

By request, we may provide a list of all operations that incur additional tax.

As a foreign Qualified Intermediary (QI) to the IRS (Internal Revenue Service), we are obliged to collect W-8 forms (“Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting”) from all clients who can potentially receive US source income in the form of dividends, coupon payments or other fixed, determinable, annual or periodic (FDAP) income.

Failure to submit the form by the end of each year will result in withholding the maximum rate of 30% applied to foreign entities or individuals. Once you submit a valid document, you can benefit from the tax treaty applicable to your specific tax residence.

Although the IRS issues the W-8 forms, they should be submitted to EXANTE as a withholding agent and not to the IRS directly.

Please fill out the questionnaire in the Client’s Area under Terms > Legal. The system will automatically generate a relevant document for you to sign electronically. No paper forms are required.

All W-8 forms are valid for the year when they are signed and for three full calendar years afterwards.

If you have any questions on the W-8 forms, please visit an appropriate section of our Help Center.

If you could not find an answer, please contact us at support@exante.eu.

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Please contact your account manager for assistance as soon as possible.

You can find the list of countries here: https://www.irs.gov/businesses/international-businesses/united-states-income-tax-treaties-a-to-z

You can find the list of Tax Rates here.

If your country is not on this list, you will have to pay the tax of 30%.

All Non-US Persons are subject to US tax at a rate of 30% on income they receive from US sources, such as dividends on US securities. If a client resides in a country with a double taxation treaty agreement with the US, he can be eligible for a reduced tax rate (generally 15%).

To ensure a reduced tax rate, you must complete a US tax form (W-8BEN/W8-BEN-E), also known as a “Certificate of Foreign Status of Beneficial Owner for the United States Tax Withholding”. The form’s purpose is to “certify” your country and confirm that you are not a resident of the United States. A W-8 series provided by a Non-US person will remain valid for a period starting on the date the form is signed and ending on the last day of the third succeeding calendar year unless a change in your circumstances makes any information on the form incorrect. For example, a Form W-8BEN signed on 30 September 2021 remains through 31 December 2024.

To comply with the policy of the US tax authorities and deduct the correct tax rate from US dividends, we are required to collect a form from every client. If you do not provide us with a valid W-8 series form, we shall be required to deduct the US tax at the highest rate specified for dividends received on US securities.

At the moment you must submit the form electronically as it is being e-signed and validated during the submission process.

• Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding (for Non-US Individuals)
• Form W-8BEN-E, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Entities) (for Non-US Legal Entities)
• Form W-8ECI, Certificate of Foreign Person's Claim That Income Is Effectively Connected With the Conduct of a Trade or Business in the United States
• Form W-8EXP, Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding
• Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding (for Intermediaries – Financial institutions/Banks)
• Form W-9, Request for Taxpayer Identification Number (TIN) and Certification (for US Persons).

• QI's (Qualified Intermediary) are allowed to handle taxation in-house without disclosing their clients to the upstream custodians and using tax treaty benefits for their clients. It means that QIs can choose to receive GROSS dividend payments from their upstream custodian. It is the responsibility of QI to collect W-8 series forms from their clients and do tax withholding.

In some cases, QI may choose to delegate the withholding and tax deposits to their upstream custodian. However, in such a case, an upstream custodian must have an appropriate infrastructure to facilitate such a request. Currently, EXANTE does not have an infrastructure to handle correct withholding for other QIs.

• Non-QIs (Non-Qualified Intermediary) can only benefit from tax treaty agreements ONLY if they disclose their individual clients to QI. Otherwise, the 30% tax rate must be applied to all US sources of FDAP (Fixed, Determinable, Annual, and Periodic) income. The upstream custodian will always withhold Non-QI, and Non-QIs cannot choose to receive GROSS dividend payments.

The US source income refers to dividends and interest earned on securities issued by US companies, US-registered mutual funds, and interest earned on US Treasury obligations and US Government agency securities. Non-US persons who receive US source income are subject to US tax withholding.

Below are links to the IRS website where the applicable Tax forms can be obtained for completion.

This walkthrough is for Non-US individuals who have no US effectively connected income (trade or business). The form is available in the EXANTE Client's Area.

Question 1

Question 2

Question 3

The below checkbox must remain unchecked if you do not meet ALL the specified conditions. If you select the box, you will be asked to provide US details, such as US address and US TIN.

The box must be checked ONLY if you meet ALL the requirements stated below:

Question 4

Question 5

Question 6

Question 7

You may leave the below section unfilled:

Question 8

Question 9

Question 10

Question 11

You may leave the below box unchecked if you are not making a particular claim under the tax treaty.

If you don't select "Yes", a valid form will be generated, but no treaty benefits will apply to the account. If you wish to take advantage of tax treaty benefits, select "Yes" and enter the treaty country.

Question 12

Question 13

Question 14

The result

A correctly completed form will result in the following status after automatic validation: