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*Please consult a professional if you’re confused or not sure about anything when filling out a W-8BEN-E form 

Do you own a US domiciled ETF or share?  I own 2. VTS and VEU.

If an investment derives its income from the US, it has to pay tax to Uncle Sam. But What happens when I get the dividend from my US ETF or share? The company has already paid tax to the US and now I’m expected to pay full tax on the dividend?

Oh Hell Naw!

This is the purpose of the W-8BEN-E form. It stops double taxation so you don’t pay tax twice in two countries. You need to fill this form out for every ETF (or investment) that is domiciled in the US. If you don’t fill it out, you will get tax twice!

Here is a video of me recently filling out my W-8BEN-E form. I had to fill it out again because I switched my broker account from Commsec to Selfwealth and created a new HIN.


SIDENOTE

I’m sometimes asked why I own these two instead of just buying VGS (or VDHG but that will be covered in an upcoming post).

In a nutshell, I go with VTS+VEU because it offers:

– Lower management fees
– Greater diversification
– Exposure to emerging markets
– Unhedged against the Australia dollar (I think the AUD is high at the moment)

Don’t be put off investments because you need to fill out a very simple form every 3 years! I understand that it’s a little bit of extra work but seriously, we are trying to reach financial independence here! What’s a couple hour extra filling out a form and doing a little more come tax time for a superior investment.

The FIRE community is constantly recommending putting in a little bit of extra work and taking things to the extreme where others won’t, to enjoy a life other can’t!

 

 

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