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How do Intеrаctivе Brоkеrs Europе do the CRS reporting?
- Thread starter DavidS
- Start date
See below
https://ibkr.info/article/2784
See above.
Don't use them.
Ok
Yes add an avatar to your profile maybe.
These don't exist anymore and if its too late, it won't change anything. And nobody wants to live in some crime ridden AFrican country.
yes, and they report to the tax agency of the signatory countries.
like they get all these lists, aggregate them and send one batch to respective countries.
That's what should happen, but the document states "For accounts held by the Interactive Brokers U.K. entity, the above information will be reported to HM Revenue & Customs of the United Kingdom".
It also shows the list of countries that will be reported, but it only states that it will be reported to HMRC, not that it will be reported to each of those countries' agencies. I doubt they are reporting to each country because I've seen some people (in my country) saying that you have to tell the taxman yourself, that IBKR won't send the information, however, I cannot confirm that's what happens. Maybe someone on the forum who lives in EU can confirm if they report or they don't.
in practice it seems CRS does not work well from outside EU and also considering geopolitics it may or may not get reported. Also interestingly IB is a USA company and I wonder what country of the weak EU has some balls to tell a USA company something to do.
CRS is a poster child of the EU communists so enforcement is to be expected to be much less than FATCA which is a USA rule and we all know how overly aggressive they are enforcing their stuff.But you can never know and never be sure about it which is all they really want to achieve to soft-force everyone to report diligently and stating the one example by punishing harshly a few.
So best is to live in a good place which either is no crs or a low/no tax place.
EU users should not be as UK is not part of EU and lost passporting rights following brexit. Accounts of EU clients should have been migrated to an EU entity by IBKR. See my thread below for more details:
https://www.offshorecorptalk.com/th...t-lower-account-protection.31731/#post-157026
Before Brexit, EU resident's were all at IBUK who was introducing broker for IBLLC USA. In 2014 FATCA started and IRS sent tax data (name, surname, address, birth date, tax residency, TIN, account value on 31.12., gross interests, gross dividends, gross proceeds) to taxman of your country where you have tax residency.
Since 2017 we have CRS, and UK's HMRC sent this data to taxman of your tax residency country, IRS also sent data via FATCA.
At the end of 2020 we have all migrated to one of IB's branch in EU (IBIE, IBLUX, IBCE) so taxman from Ireland/Luxembourg/Hungary will share data via CRS to taxman of your country where you have tax residency. And IRS will also sent data via FATCA.
There are some differences between CRS and FATCA (accounts > $50.000, every country has specific bilateral agreement), but the main point for brokerage accounts is the same (account value, gross interests, gross dividends, gross proceeds).
You can find more info on this in Council Directive 2014/107/EU. It's a long and very detailed read.
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32014L0107&from=EN
And one more thing, back in 2014 and 2015 I didn't report dividends and interest from USA (few hundred USD), my taxman sent me a letter in 2016 stating FATCA agreement and that IRS sent them data that I had dividend and interest income in USA.
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There is no deadline as in reality most brokers would just drop you or block you from trading US securities if you don't provide a W-8BEN. But in theory they should apply backup withholding tax of 30%. That means you wouldn't get any tax treaty benefits like reduced withholding tax on dividends and interest on US investments.
P.S The form once signed lasts 3 years before needing to do it again so worth doing if your into US investments.
Yes you are correct they opt to just apply backup WHT. I personally would not leave this record open and just provide the completed form.
https://www.interactivebrokers.com/en/index.php?f=1554&p=nonus&conf=am
--- quote start
Requirement to Complete Form W-8:
Form W-8, Certificate of Foreign Status, must be on file with IBKR. This form must be renewed every three years. If the form W-8 is no longer valid, IBKR will assume that you are a non-US person and withhold US tax at 30% on interest, dividends, gross proceeds and payments and lieu. Treaty rates, if applicable, will no longer apply.
Withholding Penalty
If you fail to provide a Form W-8, or do not resubmit a new W-8 when prompted upon the three-year expiration, additional withholding will apply. IBKR encourages its clients to consult with their tax advisors for further guidance on how to seek relief for any tax withheld.----- quote end
