1

What is the US dividend tax rate for a non-resident alien owning a US domiciled ETF holding non-US companies? Assume no tax treaty so the tax rate for the SPY ETF would be 30%.

An example would be a Hong Kong resident purchasing the MSCI China (MCHI) ETF.

2

What is the US dividend tax rate for a non-resident alien owning a US domiciled ETF holding non-US companies? Assume no tax treaty so the tax rate for the SPY ETF would be 30%.

The tax would still be 30%.

This is precisely why US ETFs are generally unattractive to non-resident aliens, especially if they are resident in jurisdictions that have no applicable tax treaties with the US.

The Bogleheads wiki has an article about nonresident alien taxation. Excerpt:

Apart from an exemption for some US source 'portfolio interest' income ... US withholding tax applies regardless of the actual assets held by a US domiciled ETF. Even if all of the ETF's assets are non-US stocks, the US will still take 30% or lower treaty rate in dividend tax.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.