facebookWill it be more tax efficient for singaporeans to buy China etfs that are listed in US or Hong Kong or China stock exchange? - Seedly

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Anonymous

26 Feb 2021

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General Investing

Will it be more tax efficient for singaporeans to buy China etfs that are listed in US or Hong Kong or China stock exchange?

Will there be differences in cost if we buy China etfs from different exchanges?
Example China etf from NYSE vs those that are listed in Hong Kong

Discussion (3)

What are your thoughts?

Nicholas Beh

Nicholas Beh

26 Feb 2021

Student Ambassador 2020/21 at Seedly

It will be more tax efficient to invest into HK-domiciled Chinese ETFs. This is because Hong Kong does not charge withholding tax on dividends. Only the Chinese withholding tax rate of 10% will be charged.

If you purchase a US-domiciled Chinese ETF, your dividends will be doubly taxed, firstly 10% by China and then another 30% by the US. Effectively, that's a 37% withholding tax rate!

Do note that this does not apply to individual Chinese stocks listed in the US, as those are ADRs and thus do not face the same tax treatment as ETFs.

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