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Dionysius Ang

Aerospace Engineering at Nanyang Technological University

27 Sep 2021

∙

General Investing

Dividend withholding tax - circumventing

Thanks in advance - I was wondering if anyone finds the range of ETFs in FSMOne'e RSP quite limited. I recently got hit by the 30% dividend withholding tax and want to find out if there are other options or platforms with RSP feature with better tax efficiency.

Interactive Brokers FSMOne Fundsupermart

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CTKS

27 Sep 2021

Hi, great question!

When US domiciled stocks and ETFs pay out a dividend, there is a withholding tax of 30% on non US residents.

The method I personally employ to reduce this withholding taxes is to invest in irish domiciled ETFs. These ETFs essentially track the same thing (such as S&P500 or a world index) but only have a withholding tax of 15%.

Additionally, irish domiciled etfs are exempted from estate taxes and have accumulating ETFs, great for tax efficiency and maximising compounding effects.

Personally, I use IBKR to access irish domiciled ETFs because of their low fees, great options and trustworthy reputation.

I recently wrote an article and opinion detailing everything one should know about irish domiciled etfs. Check it out in my profile, hope it helps!

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