Thailand 0% tax

[JackAlabama]

I would switch my account to IBKR US. Maybe I’m paranoid but I don’t want one of the most corrupt countries in the world having access to how much money I have plus my address when they report it through CRS.

well said. But to have ibkr us you need a residency which is there, like Dubai for example, but afaik Georgia has Ibkr usa too. All asian ones ought to be ibkr hk, so will do crs unless one is resident in hong kong itself.

They have your address by other means already and theres widespread face rec but yeah, i would not wanna have crs reports sent to these asian countries where im physically present. Maybe only some uncomplicated low-ish balance is ok.

 

[Radko]

well said. But to have ibkr us you need a residency which is there, like Dubai for example, but afaik Georgia has Ibkr usa too. All asian ones ought to be ibkr hk, so will do crs unless one is resident in hong kong itself.

They have your address by other means already and theres widespread face rec but yeah, i would not wanna have crs reports sent to these asian countries where im physically present. Maybe only some uncomplicated low-ish balance is ok.

To avoid the CRS the best thing to do is to open an account with IBKR U.S. or Charles Schwab U.S. under an LLC.

By having the account under an LLC, you also get rid of the U.S. Estate tax.

 

[Radko]

Sorry, I meant all the big ETFs (ishares, vanguard etc..) are listed under UK/Ireland, that's why you dont get normally any WHT on it (instead to US, where you get usually the flat 15% WHT)

Here’s a summary of the tax treatment of UCITS with respect to U.S. withholding:

Ireland-domiciled UCITS ETFs: These UCITS ETFs, listed in the EU, benefit from a tax treaty between Ireland and the United States. As a result, the withholding tax on dividends from U.S. securities is reduced to 15%

Accumulating UCITS ETFs: Some UCITS ETFs are structured as accumulating funds, which means dividends are reinvested within the fund rather than being distributed to investors. This can help minimize tax liabilities, as investors do not receive dividend payments and are not subject to withholding taxes.

 

[toums]

Here’s a summary of the tax treatment of UCITS with respect to U.S. withholding:

Ireland-domiciled UCITS ETFs: These UCITS ETFs, listed in the EU, benefit from a tax treaty between Ireland and the United States. As a result, the withholding tax on dividends from U.S. securities is reduced to 15%

Maybe my explanations wasn't clear. Current situations :

1) with my actual portuguese address (on IB), i don't have any WHT (0%) on dividends received from Ireland/UK ETFs domicilied (included all basics MSCI world vanguard, ishares etc...).

2) I have 15% WHT tax on dividend stocks directly linked to US (as for mostly everyone I think)

3) For cash interest (USD) it's still linked with Ireland, BUT there is still a 15% WHT on the interest (as i understood/know it's not linked with US).

My question was if by putting Thailand address the WHT tax of Ireland-UK ETFs still stay at 0%. And If also you can do it at 0% WHT for the cash interest.
For the 2) I think anyway it's stay at 15% for anyone (except US citizen-resident / LLC)

 

[churumbelo]

To avoid the CRS the best thing to do is to open an account with IBKR U.S. or Charles Schwab U.S. under an LLC.

By having the account under an LLC, you also get rid of the U.S. Estate tax.

Are there any negative repercussions to holding my IBKR assets under a US LLC? Currently, all my assets are in my name. I'm contemplating establishing a US LLC to transfer my assets, providing an additional layer of protection since the assets would not be directly under my name. I was under the impression that US Estate tax would still apply, but you have just confirmed that this is not the case, which is positive. I do not care much about the CRS in this case, so it is not really relevant, but it does not harm.

However, regarding capital gains taxes, dividends, etc., I'm uncertain if this would trigger taxable events in the US, as the asset owner would be the LLC, potentially qualifying as ETBUS despite being a disregarded entity.

In a nutshell: what are the advantages and disadvantages of forming a New Mexico LLC solely for holding investments in IBKR, compared to owning the investments personally? My investments are exclusively in Ireland-domiciled ETFs.

TIA!

 

[Radko]

Maybe my explanations wasn't clear. Current situations :

1) with my actual portuguese address (on IB), i don't have any WHT (0%) on dividends received from Ireland/UK ETFs domicilied (included all basics MSCI world vanguard, ishares etc...).

2) I have 15% WHT tax on dividend stocks directly linked to US (as for mostly everyone I think)

3) For cash interest (USD) it's still linked with Ireland, BUT there is still a 15% WHT on the interest (as i understood/know it's not linked with US).

My question was if by putting Thailand address the WHT tax of Ireland-UK ETFs still stay at 0%. And If also you can do it at 0% WHT for the cash interest.
For the 2) I think anyway it's stay at 15% for anyone (except US citizen-resident / LLC)

You need to find the DTA between Thailand and Ireland/UK.

Are there any negative repercussions if I have my IBKR assets under a US LLC? I mean, right now I have everything under my name. I have been considering to open a US LLC to transfer everything to the LLC so I get some extra protection as assets would not be directly under my name, but I thought I the US Estate tax was still applicable, you just have confirmed it is not, which is good.

But when it comes to capital gains taxes, dividends, and so on, I do not know if this would trigger taxable events in the US as the owner of the assets is a company in the LLC and this could be somehow considered ETBUS although is a disregard entity.

So in a nutshell: what are the pros and cons of opening a, let's say, New Mexico LLC only to hold investments in IBKR as opposed to having the investments under my name? I only invest in Ireland domiciled ETFs.

TIA!

Good questions.....

Correction, under a Single Member LLC (SMLLC) you are still subject to the Estate Tax.
Under a Multi Member LLC (MM LLC) you are not subject to the Estate tax as the MMLLC has two or more members.
Some people are going the extra mile by having a MMLLC owned by a foreign Corporation, such as a Panamanian company, a foreign company cannot die.
I only have a MMLLC, and my CPA tells me that's enough to get rid of the Estate Tax.

By having the account under an LLC or a MMLLC you are NOT subject to Capital gains Tax, or any type of Tax in the U.S. as the LLC is a passthrough entity. So you would have to pay taxes in your country of residency (if your country of residency has those taxes, if not, everything you make is tax-free.)

You are still subject to the withholding tax on dividends received, and that is based on the DTA between the U.S. and your country of residency.

Hope that helps.

 

[churumbelo]

You need to find the DTA between Thailand and Ireland/UK.



Good questions.....

Correction, under a Single Member LLC (SMLLC) you are still subject to the Estate Tax.
Under a Multi Member LLC (MM LLC) you are not subject to the Estate tax as the MMLLC has two or more members.
Some people are going the extra mile by having a MMLLC owned by a foreign Corporation, such as a Panamanian company, a foreign company cannot die.
I only have a MMLLC, and my CPA tells me that's enough to get rid of the Estate Tax.

By having the account under an LLC or a MMLLC you are NOT subject to Capital gains Tax, or any type of Tax in the U.S. as the LLC is a passthrough entity. So you would have to pay taxes in your country of residency (if your country of residency has those taxes, if not, everything you make is tax-free.)

You are still subject to the withholding tax on dividends received, and that is based on the DTA between the U.S. and your country of residency.

Hope that helps.

Thanks! That's what I thought. I did some research some time ago and I read that a SMLLC is still subject to the Estate Tax. Although I assume that transferring the company to a relative while still alive would not be subject to the Estate Tax. Not sure though. I will have to look into that.

 

[Clank]

To avoid the CRS the best thing to do is to open an account with IBKR U.S. or Charles Schwab U.S. under an LLC.

By having the account under an LLC, you also get rid of the U.S. Estate tax.

This is not correct, unless you treat the LLC as a corporation and has more than one shareholder.

If it’s a pass through entity it will have estate taxes.

 

[Radko]

This is not correct, unless you treat the LLC as a corporation and has more than one shareholder.

If it’s a pass through entity it will have estate taxes.

You need to read my other comment.

 

[JustAnotherNomad]

1) with my actual portuguese address (on IB), i don't have any WHT (0%) on dividends received from Ireland/UK ETFs domicilied (included all basics MSCI world vanguard, ishares etc...).

Yes, that's the whole point why those funds are domiciled in Ireland/Luxembourg: There is no WHT.
The funds gets access to the US treaty, so the US WHT is reduced to 15%, but then that's it, as Ireland/Luxembourg don't impose additional WHT.
That's what attracts those funds there. It's not a coincidence they're all domiciled there.

2) I have 15% WHT tax on dividend stocks directly linked to US (as for mostly everyone I think)

Yes, that's per the tax treaty between the US and Ireland/Luxembourg.

Are there any negative repercussions to holding my IBKR assets under a US LLC? Currently, all my assets are in my name. I'm contemplating establishing a US LLC to transfer my assets, providing an additional layer of protection since the assets would not be directly under my name. I was under the impression that US Estate tax would still apply, but you have just confirmed that this is not the case, which is positive.

If you own the US LLC directly, everything owned by the US LLC will fall under US estate tax.
If you own the US LLC through a foreign corporation, the estate tax risk goes away because the foreign corporation cannot die. But there's a risk of branch profit tax in the US if you do any kind of operations in the US.

You need to find the DTA between Thailand and Ireland/UK.

No. The DTA can only reduce taxes, not add new taxes. But the WHT is already 0% for Ireland/Luxembourg.

 

[Radko]

Yes, that's the whole point why those funds are domiciled in Ireland/Luxembourg: There is no WHT.
The funds gets access to the US treaty, so the US WHT is reduced to 15%, but then that's it, as Ireland/Luxembourg don't impose additional WHT.
That's what attracts those funds there. It's not a coincidence they're all domiciled there.



Yes, that's per the tax treaty between the US and Ireland/Luxembourg.



If you own the US LLC directly, everything owned by the US LLC will fall under US estate tax.
If you own the US LLC through a foreign corporation, the estate tax risk goes away because the foreign corporation cannot die. But there's a risk of branch profit tax in the US if you do any kind of operations in the US.



No. The DTA can only reduce taxes, not add new taxes. But the WHT is already 0% for Ireland/Luxembourg.

All those ETFs based in Ireland suffer from tracking error, it's way better to own U.S. ETFs.

 

[JustAnotherNomad]

US ETFs have estate tax (unless you hold them through a foreign entity) and also potentially 30% WHT (unless they are swap-based, I think).