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I have 894 shares of AXAHY (which is an American depositary receipts (ADR)) on my Fidelity brokerage account. According to this answer by Flux, the depositary fees for AXAHY in 2020 are 0.04 USD per ADR. Therefore, my depositary fees for 2020 should be 894 * 0.04 = 35.76 USD. However, I got charged a 40.23 USD fee. What could explain this discrepancy? Am I getting charged something else other than the depositary fees?

Note that the 40.23 USD fee doesn't include the taxes withheld by the ADR company's local government (which is in this case the French government, who withholds 12.8% of the AXAHY dividends, which matches the "foreign tax paid" row on my Fidelity brokerage account and which I don't mind as the AXAHY shares are placed in a taxable account, so I can claim tax credits via IRS Form 1116).

I contacted Fidelity's customer service and they have no clue.


Interestingly, my Merrill Edge brokerage account, which also contains some ADRs, is much clearer regarding ADR fees:

  1. It clearly states "Depository Bank (ADR) Fee" on the history of operations.
  2. It distinguishes the dividend fee (0.04/ADR/year for AXAHY, as confirmed by this answer by Flux) from the tax relief fee (0.005/ADR/year for AXAHY, as confirmed by this answer by Flux). However both are labeled "Depository Bank (ADR) Fee".
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Am I getting charged something else other than the depositary fees?

The discrepancy is caused by a "Tax Relief Fee" of $0.005 per share:

AXAHY 2020 cash dividend

Source: AXAHY 2020 Cash Dividend Announcement (mirror)

So the fees you paid are:

  • 894 * 0.04 = 35.76
  • 894 * 0.005 = 4.47

Total: 35.76 + 4.47 = 40.23

If not mistaken, the "Tax Relief Fee" is an administrative fee charged by the depositary bank to minimize your taxes (e.g. by taking advantage of tax treaties). I've asked a follow-up question about this "Tax Relief Fee" (What are "Tax Relief Fees" on American Depositary Receipt (ADR) dividends?), because I too would like to know for sure.

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