[BE] Dividend @ DeGiro and Belgian Taxation - How does it work?

[caddyman]

Hello eupersonalfinance,

Original dutch post @

https://www.reddit.com/r/DutchFIRE/comments/aze9kj

Some question for the Belgian people in the community. I have an account @ DeGiro where I deposit some money every month in a IWDA ETF (free because it's their core selection). But I have not yet decided how I can make my porfolio/mindset more robust. It can be a percentage of cash reserves / Obligation / monthly cash flow through dividends.

Aside from my DeGiro account (Dutch broker), I also have an account at Bolero (Belgian broker/bank). I'm trying to find as much as information as possible before deciding my strategy.

How does the Belgian withholding taxation work:

Belgium has treaty's with multiple country's. Already found quite some information here (Dutch) : https://www.test-aankoop.be/invest/fiscaliteit-en-wetgeving/belastingheffing/dossiers/belasting-van-buitenlandse-dividenden/belasting-van-buitenlandse-dividenden I have copied a couple of examples.

Share Share domicile Source withholding tax Belgium withholding tax Final withholding tax
CPINV
Belgium
N/A, Belgium share
15% (because BE-REIT in care sector)
15%

SPDR S&P Euro Dividend Aristocrats UCITS ETF
Ireland
20% or 0%
30%
44% or 30%

Coca-Cola
US
30% or 15%
30%
51% of 40,5%

SPDR S&P US Dividend Aristocrats UCITS ETF
Ireland
20% or 0%
30%
44% or 30%

Questions in regards to the Belgian withholding tax:

1. Does DeGiro withhold the Belgian tax?
2. Does DeGiro withhold the correct Belgian tax? For example, general withholding tax is 30%. BE-REIT's which focus in the care sector are only taxed 15%.
3. If DeGiro does not withhold this tax, this means I have to declare it in my personal income taxes? . Does anybody know where? And what do you enter? The full dividend amount? Or the taxes you should pay?
4. I assume that Bolero (as a Belgian bank/broker) will do this for sure ?
5. The paid Belgian withholding tax can be entered in my personal finances to enjoy the tax reduction on withholding tax?

Questions in regards to the source withholding tax:

1. How can I benefit from the double taxation treaty's? For US shares @ DeGiro ==> I have to fill in a W8-BEN form. But what about the other countries? Is this done automatically by DeGiro and Bolero?
2. Does Bolero have an advantage over DeGriro in regards to correct taxation?
3. Who deduct's the source withholding tax? Could someone write up an example for an ETF/Share from Ireland/US? For example:
   1. Coca cola deducts withholding tax of 30%
   2. DeGiro recuperates 15% because of the taxation treaty
   3. From the remainder, DeGiro will subtract again 30% for the Belgian withholding tax
   4. I don't have to do anything

 

[laditori]

@caddyman !Remindme 2 days

 

[tmsigsys]

@caddyman Bolero does it all for you but you have to message their customer service desk for certain documents.
These are for reductions on foreign withholding taxes.

 

[cphill]

@caddyman DeGiro does withhold dividend taxes. You can find more about them in the withholding tax tab in their page https://www.degiro.ie/tax.html

DeGiro will withhold those taxes if you hold shares directly of companies domiciled in those countries.

If you hold shares of a fund things will be different since you have to account for the domicile of the securities (e.g. the holdings of the fund), the domicile of the fund, and your domicile. I’ve explained this in more detail for an Irish domiciled fund here. In the case of an Irish domiciled fund, DeGiro won’t withhold any taxes because the fund is domiciled in Ireland and Ireland does not withhold taxes for their ETFs to foreign investors. The Irish fund would pay dividend withholding taxes since it is the effective owner of the securities. You won’t be able to deduct withholding taxes paid by an Irish fund, since you didn’t pay them, the fund did.

You could deduct withholding taxes for the US for example if you held a US domiciled fund. In that case your broker would withhold dividend taxes.

The bogleheads wiki also has a great write up on this https://www.bogleheads.org/wiki/Nonresident_alien_with_no_US_tax_treaty_&_Irish_ETFs

 

[caddyman]

@cphill Thanks for the information ! I have bookmarked your site to my favorites, great read!