It is a mandatory Internal Revenue Service (“IRS”) requirement for all individuals who trade equities in The United States of America (“US”) to register their beneficial owner status and declare their status in terms of being non-US, for FATCA* purposes.
Standard Bank uses Globetax for its IRS reporting as well as Relief at Source (“RAS”) benefits that may arise as a result of clients trading on Standard Bank Webtrader. All Standard Bank Webtrader clients who trade equities in the US are required to register with Globetax** and sign a W8 BEN Form declaring his/her tax residency and declaring beneficial ownership of the US equity, dividends and any other income source that may result from trading on US Exchanges through Standard Bank Webtrader.
Where a client has traded US equities without registering for Globetax, an annual IRS reporting Fee of USD 80 per income stream will apply.
Summary of Benefits in Filing a W8 BEN Form when trading US Stocks
- IRS reporting obligations are maintained.
- The standard annual IRS reporting Fees of USD 80 per income stream is waived for clients who have signed up for with Globetax. This translates to a minimum net saving in fees of USD 240over any 3 year period
- There may be an added benefit of RAS should your country of tax residence have a Double Taxation Agreement (“DTA”) in place with the US (See explanation below).
Let Globetax help you benefit
- Globetax is a third party service provider who assists for this purpose.
- Using the Globetax eCerts portal https://ecertsus.globetax.com/, you can complete the W8 BEN Form online and then print and sign the form.
- Use the access code USDOCS61
- When prompted for your account number insert your Standard Bank Webtrader user ID
- Contact the Webtrader team or your Portfolio Manager to arrange courier collection of the original signed documentation.
- On receipt of the original form by Globetax, Globetax will file the relevant form with the IRS and apply any tax RAS due on your Webtrader account, which is valid for a period of 3 (three) calendar years.
How Much Does it Cost?
The Globetax registration fee is USD 35, which covers you for a period of 3 years. This includes production, validation and 3 years storage of your W-8 BEN form by Globetax.
What is Relief at Source?
The US imposes a 30% withholding tax on dividends (“DWT”) declared on US equities, which may be reduced under the Double Taxation Agreement (“DTA”) between your country of tax residence and the US. Kindly consult a tax advisor familiar with your country specific taxation regulations.
The reduced DTA rate is applied at source provided that the investor duly complete, signs and submits a W8 BEN form to Globetax, which is a declaration of beneficial ownership and tax residency status, as required by the Internal Revenue Service (“IRS”). Should a client invest in US equities and receive a dividend as a result thereof, he/ she may then qualify for a saving in US DWT if the DTA makes provision therefore. Where a client has not provided a completed and signed W8 BEN form to Standard Bank, a 30% DWT will be imposed at source and Standard Bank will be required to report the particulars of the client to the IRS.
Savings on DWT will vary dependent on your country of residence, portfolio composition, and dividends earned.
Should you require further assistance on this matter, kindly contact your Portfolio Manager or alternatively call Standard Bank Webtrader on 0860 121 555
* The Foreign Account Tax Compliance Act (FATCA) which was enacted as part of the Hiring Incentives to Restore Employment (HIRE) Act on March 18, 2010
**The Standard Bank of South (“Standard Bank”) strongly recommends that a client should conduct its own due diligence in respect of utilising the services of Globetax for purposes of administering its tax affairs on its US equity holdings. Standard Bank is merely an intermediary between Globetax and the client and facilitates the delivery of documentation to Globetax on behalf of the client. A client should also seek its own independent advise on this matter and it must ensure that it reads and understands any agreement it enters into with Globetax and the implications of the W8 BEN form. No representation, warranty or undertaking (express or implied) is given and neither responsibility nor liability is accepted by any member of the Standard Bank Group Limited including Standard Bank, its employees and agents, as to the accuracy of the tax information and/or the client’s use of Globetax, for the purposes as set out herein and/or any delay in Standard Bank submitting the W8 BEN form to Globetax on behalf of the client. No member of the Standard Bank Group shall be held liable by a client for the use of and reliance on the information provided herein and/or the client’s losses, expenses and/or damages suffered by it as a result of the client’s use of Globetax as its service provider.