In this FAQ you will find information on tax-related topics such as financial transaction taxes, withholding taxes, and tax residency. This document is provided for information purposes only and is not intended to be tax advice. The information contained in this document is general in nature and shall not be regarded as exhaustive. Tax treatment depends on the individual circumstances of each client and may be subject to change in the future. This document has been written with the utmost care, however, Moonie Trade does not accept any responsibility for its content. We advise you to consult your own tax advisor before making any tax decision.
Below is a selection of available products and markets.
The country in which you are considered a tax resident is dependent on local tax legislation. The following website provides an overview of the tax residency rules applicable in various countries. It can be the case that you have tax obligations in more than one country, however your tax residency is most likely only in one country. If you are uncertain about your tax residency, please contact a tax advisor for assistance.
Moonie Trade is a financial institution and as such is legally obliged to inform the Dutch tax authorities of the countries in which you are considered a tax resident. The Dutch government cooperates with many other countries to counter tax evasion and therefore requests this information from financial institutions. This is further explained below in the questions ‘What are Common Reporting Standards (CRS)?’ and ‘What is the Foreign Account Tax Compliance Act (FATCA)?’.
Moreover, we may ask your tax residency to determine whether a reduced withholding tax rate applies under a tax treaty established between your residence country and the source country (for example, the tax treaty with the US).
To help fight tax evasion and to protect the integrity of tax systems, governments around the world introduced a system for automatic exchange of information on financial accounts between countries. This system is known as CRS. The CRS are incorporated in Dutch law.
As a result, Moonie Trade is obliged to verify in which country a client is (potentially) a tax resident. Moonie Trade is obliged to share this information with the Dutch tax authorities. Subsequently, the Dutch tax authorities share this information with the tax authorities in the country where the relevant client (potentially) is a tax resident.
FATCA is somewhat similar to CRS, but then specifically to fight against tax evasion in the United States. FATCA ensures that ‘U.S. Persons’ file a (complete) tax return with the US Internal Revenue Service that also contains their assets maintained at financial institutions outside the United States.
FATCA is incorporated in Dutch law and as a result, Moonie Trade is obliged to verify whether its clients are considered U.S. Person. Moonie Trade is obliged to share this information with the Dutch tax authorities. Subsequently, the Dutch tax authorities shares this information with the US Internal Revenue Service.
A Tax Identification Number (TIN) is internationally used as an identification number for tax purposes. The issuance, structure, use and validity of the TIN differs per country. In general, TINs are automatically issued upon birth or upon becoming subject to tax in a country.
In the UK, your TIN is your National Insurance(NI) Number.
Yes, that is possible. The concept of tax residency entails that the country which considers you a tax resident designates you as subject to its domestic tax laws. Domestic tax law and/or tax treaties concluded by this country can subsequently exempt the subject (you) or the object (your income) from taxation. As a result, you effectively do not pay tax in that country while you are still considered to be a tax resident in that country.
If your tax residency changes, you have to update this information within 30 days. To do this, log in to your account and go to your profile section in the bottom left-hand corner. From there, click on ‘Tax information’ and then ‘Change tax information’. This will lead you to the tax information form where you can provide us with your updated details. It is important that you inform Moonie Trade promptly of any changes in circumstances.
Due to the implementation of CRS and FATCA in the Dutch legislation, Moonie Trade is obliged to provide the Dutch tax authorities information on its clients and their accounts. The following information may be shared (of private individuals):
As a private individual, you are a US Person if you are considered a US citizen/national or a US residential alien. The term “US citizen/national" comprises:
The term "US resident aliens" comprises:
Please visit www.irs.gov for more information about the green card and the substantial presence test.
Transaction tax is the collective name for taxes charged on transactions in financial instruments. Countries such as Belgium, France, Greece, Hong Kong, Italy, Ireland, and the UK have a transaction tax. In Hong Kong, Ireland, and the UK it is levied in the form of Stamp Duty. All countries use different parameters in dictating which transactions are taxable. In certain instances, the different transaction taxes may apply on the same transaction.
By clicking on the dropdown menu, you can find an overview for the different Financial Transaction Tax by country. This includes who is subject to the tax, which instruments the tax applies, when the tax is applied (the taxable event), and rate of the tax.
In general, the Belgian financial intermediary is liable to pay Belgian FTT. In case transactions are executed by a foreign financial intermediary, the taxpayer status is generally shifted to the Belgian resident individual or corporate entity. The Belgian resident is however relieved of his obligation to pay the tax if the foreign financial intermediary pays on his/her behalf.
Moonie Trade collects Belgian FTT from its Belgian resident clients. Moonie Trade then pays and reports the Belgian FTT to the Belgian tax authorities. Belgian resident clients can however choose to calculate and pay the tax and furnish the preparation and filing of a Belgian FTT tax return themselves.
Belgian FTT applies to financial instruments issued by Belgian and non-Belgian resident companies. The financial instruments in scope include, but are not limited to, shares, ETFs, bonds, contractual fund participations, shares in investment companies, and certificates. Transactions in CFDs and futures are not included in the scope.
The taxable event includes both the buy as well as the sell transaction when it takes place in exchange for a consideration (payment) and is executed on the secondary market (for example, an exchange).
For example, the purchase or sale of a share on the exchange is subject to Belgian FTT. Conversely, the purchase of a call option is not subject to Belgian FTT, however the acquisition of the underlying stock upon exercise or assignment of the option is subject to Belgian FTT. Additionally, the redemption of a share in an accumulating investment company is also considered a taxable event.
The applicable tax rate and taxable base for Belgian FTT depend on the instrument. Below you can find an overview of the applicable tax rates per instrument type (as of 2020). The applicable rate is calculated on the transaction value.
| Overview applicable tax rates | Primary Market | Secondary Market | Maximum FTT per transaction | ||
| Instrument type | Issuance | Redemption | Buy | Sell | |
| Shares | 0 % | 0 % | 0.35% | 0.35% | €1,600 |
| Shares in Belgian registered real estate investment trusts | 0 % | 0 % | 0.12% | 0.12% | €1,300 |
| Bonds | 0 % | 0 % | 0.12% | 0.12% | €1,300 |
| Participations in contractual funds registered in European Economic Area | 0 % | 0 % | 0.12% | 0.12% | €1,300 |
| Participations in contractual funds not registered in European Economic Area | 0 % | 0 % | 0.35% | 0.35% | €1,600 |
| Shares in investment companies registered in European Economic Area other than Belgium only | 0 % | 0 % | 0.12% | 0.12% | €1,300 |
| Shares in investment companies not registered in European Economic Area; | 0 % | 0 % | 0.35% | 0.35% | €1,600 |
| Accumulating shares of investment companies registered in Belgium | 0 % | 1.32% | 1.32% | 1.32% | €4,000 |
| Distributing shares of investment companies registered in Belgium | 0 % | 0 % | 0.12% | 0.12% | €1,300 |
| Certificates whereby the issuer is registered in Belgium | 0 % | 0 % | 0.12% | 0.12% | €1,300 |
| Certificates whereby the issuer is not registered in Belgium | 0 % | 0 % | 0.35% | 0.35% | €1,600 |
| Warrants | 0 % | 0 % | 0.35% | 0.35% | €1,600 |
| Turbos, Sprinters | 0 % | 0 % | 0.35% | 0.35% | €1,600 |
source:https://financien.belgium.be/nl/particulieren/internationaal/buitenlandse-inkomsten-en-rekeningen/taks-op-beursverrichtingen#q1
The acquirer of a financial instrument is subject to French FTT. However, Moonie Trade automatically calculates, withholds, reports and pays the French FTT due.
French FTT applies to certain shares, or similar instruments, issued by French tax resident companies with a market cap of at least €1 billion (as of 1 December of the preceding year) as well as certain instruments representing these shares. In addition, the instrument must be admitted for trading on a French, European or foreign regulated market. For the list of companies in the scope of French FTT (as of 2020) you can click here.
The taxable event is the purchase transaction as well as the acquisition as a result of the exercising or assignment of a derivative position. This means that the purchase of a call option is not subject to FTT, whereas the acquisition of the underlying stock upon exercise of an option is subject to FTT.
The tax rate for French FTT is 0.30% (as of 2020) and is calculated on the transaction value. Intraday transactions per financial instrument are netted.
At Moonie Trade we process the intraday netting at the end of the day. This means that during the day, all acquisitions are taxed in full and any potential refund will be credited after market close.
The person alienating a financial instrument is subject to Greek FTT. Greek FTT is automatically withheld and Moonie Trade passes this tax on to clients.
Greek FTT applies to transactions in shares listed on the Athens Stock Exchange.
The taxable event is the sell transaction.
The tax rate for Greek FTT is 0.20% (as of 2020) and is calculated on the transaction value.
Italian FTT is applied to transactions on Italian equity instruments (491-taxation) and on transactions in derivative instruments (492-taxation).
The acquirer of the equity instrument is subject to 491-taxation. Both counterparties of a transaction in derivatives are subject to 492-taxation.
Moonie Trade automatically calculates, withholds, reports, and pays on behalf of clients the Italian FTT due.
491-taxation applies to shares and other equity instruments issued by Italian tax resident companies with a market cap of at least €500 million (as of November the preceding year) and other financial instruments that represent those shares. A list of Italian resident companies currently not in scope of Italian FTT (as of 2020) can be found here.
492-taxation applies to derivative products whose value for more than 50% depends on financial instruments subject to 491-taxation, irrespective of the issuer’s residence.
The taxable event for 491-taxation is the purchase transaction and the acquisition resulting from the exercise or assignment of derivatives positions. A redemption of shares or other corporate actions may be exempted from 491-taxation.
The taxable event for 492-taxation is the purchase and the sell transaction of a derivative contract.
The applicable tax rate for a 491-taxation is 0.10% (as of 2020) for transactions dealt on a regulated market or a multilateral trading facility. For trades outside these markets, the applicable rate is 0.20% (as of 2020). This rate is charged on the transaction value, whereby intraday buy and sell trades per financial instrument are netted. At Moonie Trade we process the intraday netting at day end. This means that during the day all acquisitions are taxed in full and any potential refund will be credited after market close.
The tax rate for 492-transactions varies and depends on the type of derivative, the total (notional) value of the contract and whether the derivative was traded on a regulated exchange or not.
Both the person acquiring and the person alienating the financial instrument are subject to HK stamp duty. The HK stamp duty is automatically withheld and Moonie Trade passes this tax charge on to its clients.
In general, HK Stamp Duty is applied to transactions in shares that are listed on the Hong Kong stock exchange.
The taxable events are the sell and purchase transactions.
The tax rate is 0.20% per transaction (as of 2020) and is shared equally between the buyer (0.10%) and seller (0.10%). The tax rate is calculated over the transaction value.
The acquirer of the equity instrument is subject to UK stamp duty. The UK stamp duty is automatically withheld and Moonie Trade passes this tax charge on to its clients.
In general, UK stamp duty applies to shares issued by a company established in the UK or with a share register in the UK. Eligible securities listed on the London Stock Exchange's Alternative Investment Market (AIM) segment are excluded from Stamp Duty
The taxable event is the purchase transaction.
The tax rate is 0.50% (as of 2020) and is calculated on the transaction value.
The acquirer of the equity instrument is subject to Irish stamp duty. Irish stamp duty is automatically withheld and Moonie Trade passes this tax charge on to its clients.
IE Stamp Duty generally applies to shares or similar instruments issued by Irish companies listed on the Irish Stock Exchange. Small and medium sized companies listed on Euronext Growth (former Enterprise Securities Market) are exempted from IE stamp duty.
The taxable event is the purchase transaction.
The tax rate is 1.00% (as of 2020) of the transaction value.
A tax treaty is an agreement between two countries stipulating which country has which levying rights in respect of a particular income. This prevents a person from being taxed twice (by two countries) on the same income. The content of a tax treaty differs per bilateral situation and thus the precise tax consequences can only be determined by consulting the relevant bilateral tax treaty. Most tax treaties provide for a mitigated withholding tax on dividend and interest income.
You need to determine in which country you are considered a tax resident and in which country the issuer is a tax resident. For instance, if a British tax resident receives a dividend payment on his/her shares of Volkswagen AG (Germany), the British-German tax treaty needs to be consulted. It is not relevant that Moonie Trade is a tax resident in the Netherlands for the application of the tax treaty, as Moonie Trade is not the ‘beneficial owner’ of the income.
In practice, applying the lower tax treaty rate to your foreign income at the source is usually not possible. This is due to the fact that, for the withholding agent, it is not clear who the ultimate beneficiary of the income is. This is caused by the fact that there can be many parties interposed between the beneficial owner and withholding agent, such as (several) foreign and domestic parties in the custody chain (custodians). The withholding agent then withholds the statutory tax rate and not the lower tax treaty rate.
Your investment is probably a US partnership. These fiscally transparent partnerships do not pay tax on their business profits in the United States, but instead, the participants who invest in the partnership are included in US taxation. For participants from outside the United States, tax is levied by applying withholding tax on the income distributions of the partnership. The rate of this withholding tax is usually 37% and the US taxation right on this income is not restricted by a tax treaty.
In cases where a lower tax rate should be applied on the basis of a tax treaty, it is occasionally possible to reclaim part of the withheld tax in the source country. To reclaim excess paid withholding tax, a reclaim request needs to be submitted at the tax authorities in the source country. The complexity of the reclaim process varies per country.
Each country adapted its own reclaim procedure. Usually these procedures are time consuming, costly and require the cooperation of different parties. For this reason, it is seldom profitable to start a reclaim procedure.
Sometimes tax authorities require a tax document such as a tax voucher, dividend note or another tax statement from your broker in order to process tax reclaims or to credit withholding tax in your personal income tax return. Currently, Moonie Trade is unable to issue such tax documents. Such documents are subject to strict rules. As Moonie Trade is liable for the content of the tax documents, it needs to be sure that the documents are compliant and auditable in line with different relevant regulations. In addition, Moonie Trade is dependent on information from other parties within the custody chain. Moonie Trade is working on a solution so that it will be able to issue tax documents in the future.
Excess withheld tax is a known issue in the financial sector. Supranational organisations, such as the Organisation for Economic Cooperation and Development (OECD) and the European Union (EU) have been working on (potential) solutions for quite some time. Moonie Trade monitors the developments in this area and is constantly exploring solutions that make investing cheaper and more attractive for its customers.
The United States has introduced a system where, under certain conditions, the lower tax treaty rate can directly be applied at source. Moonie Trade has entered into an agreement with the Internal Revenue Service (US tax authority) to make use of this system. This way Moonie Trade enables its clients to benefit from the lower tax treaty rates provided for in the tax treaty between their country of tax residence and the United States. In general, the US tax treaties provide for a reduced withholding tax rate of 15% on dividend income.
You can request Moonie Trade to apply the lower tax treaty rate on dividend and interest income from the United States when there is a tax treaty in place between the United States and your tax residence country. You can do this by completing the task ‘W-8BEN/ W-8BENE’.
Moonie Trade offers this 'Relief at Source' service to clients whose country of residency, country of tax residency and bank account country match (should be the same country). Based on the information you provide, Moonie Trade will determine whether you are entitled to the lower tax treaty rate.
Due to the regulatory and operational setup required for providing relief at source on US income, Moonie Trade will only apply lowered tax treaty rates on income on a selected list of US products from 30-06-2020 onwards. For US products available through our platform, but not on this list, the statutory tax rate will be applied.
A list of the products that will continue to be in the scope can be found here. Note that the list contains over 2,000 US products. In general, these include many of the most frequently traded US stocks. These will not be affected by the change in service and thus the lowered tax treaty rate will still be applied.
As of 30-06-2020, you will also be able to find the list within the trading platform. You will then be able to see if a specific US product is eligible for relief at source on the details page of that product.
When you invest in financial instruments, you might encounter taxation on your income, such as on dividends or coupons. Directly at the pay-out of the income, tax is withheld and paid to the tax authorities of the resident country of the paying organisation (source country). This form of taxation is called withholding tax. Examples are dividend withholding tax and interest withholding tax.
Withholding tax is usually withheld by the paying agent of the paying organisation, but withholding can also take place higher up the custody chain. Moonie Trade usually receives the income as a net amount, after the deduction of the withholding tax.
Withholding tax rates differ depending on the source country and the nature of the income paid.
The withholding tax rate is dependent on the rules of the source country and the nature of the income. Below you can find an overview of the statutory tax rates applied to dividend income per source country*.
| Dividend tax % | Dividend tax % | ||
| Australia | 30.00% | Italy | 26.00% |
| Austria | 27.50% | Japan | 15.315%** |
| Belgium | 30.00% | The Netherlands | 15.00% |
| Canada | 25.00% | Norway | 25.00% |
| Czech Republic | 35.00% | Poland | 19.00% |
| Denmark | 27.00% | Portugal | 35.00% |
| Finland | 50.00% | Singapore | 0.00% |
| France | 28.00% | Spain | 19.00% |
| Germany | 26.375%** | Sweden | 30.00% |
| Greece | 5.00% | Switzerland | 35.00% |
| Hong Kong | 0.00% | Turkey | 15.00% |
| Hungary | 15.00% | United Kingdom | 0.00% |
| Ireland | 25.00% | United States | 30.00% |
* This information is intended to be general in nature and cannot be considered exhaustive. Please be aware that there can be exceptions to these estimates. Although this table has been compiled with the utmost care, Moonie Trade does not accept any responsibility for its content and no legal claims can be derived from it. We advise you to consult your own tax advisor before taking any decision on the basis of this information. Overview as of 1-1-2020. Please be aware that there can be exceptions.
** Effective rate, including surtax.
It can be difficult to determine the tax residency of an organisation based on information that is publicly available. Rules for determining tax residency vary from country to country. It is, therefore, possible that an organisation is considered a tax resident in multiple countries. If this is the case, a tax treaty determines which country has which levying rights.
Furthermore, the tax residency determination is usually dependent on specific facts and circumstances. The Netherlands, for example, takes into consideration whether the company is incorporated under Dutch law, where important business decisions are made, where lies the decision-making authority, where statutory directors meet and work, and where the books are kept, amongst other things.
Which withholding tax applies is determined on the basis of the tax residency of the issuer. In case the issuer is a tax resident of France, it is correct that French withholding tax is levied. The exchange where the issuer is listed is irrelevant.
The tax treatment differs per Exchange Traded Fund (ETF) and is among others dependent on the fund structure. The following aspects need to be considered:
To answer the question asked; German withholding tax can be levied in the case that the ETF is considered a fiscal transparent fund based on Luxembourg legislation and the income the fund receives originates from a German investment. The income and the accompanying German withholding tax are then attributed to the fund participant who is considered to have received the income directly.
Most likely this has to do with securities lending. It may be that (a part of) your position was lent during the dividend payment. In that case, you do not receive a dividend, but rather a dividend substitute payment.
In the trading platform, no distinction is made between a dividend and dividend substitute payment; both are categorized under the description of dividend. A dividend substitute payment is generally not subject to withholding tax. As a result, the total withholding tax paid as a percentage of the dividend presented in the trading platform can be lower than the statutory rate of the source country.
This is probably due to the reclassification of income distributions. In certain situations, claims and elections made by the issuer during or after the fiscal year can affect the nature of the income with retroactive effect. As a result, the tax treatment of some or all of the income that was distributed to investors during the year may change.
Income distributions from certain financial instruments are most likely to experience income reclassification, such as US Real Estate Investment Trusts (US REITs) and US mutual funds. In addition, investments in certain assets, such as commodities and real estate are also more likely to require income reclassification.
If you hold a short position on the ex-date of the income, you have the obligation to reimburse the lender of the financial instrument for an amount equal to the gross income that would have been distributed to him would he not have lent you the financial instrument. This contractual compensation is generally referred to as a substitute payment.
UK tax resident clients may be obliged to complete Form SA106 to report foreign income and gains received from investment(s) overseas. The following foreign income should be included:
The document SA106 notes provides more information and can help you to complete Form SA106.
The total interest and dividend income can be obtained directly through the trading platform or can be derived from the Annual Report. All information regarding Cash Fund participations can be found in the Document Centre of the Moonie Trade website.