Does every VMware shareholder getting the 30% "Chapter 3 ("NRA") Withholding Tax" deducted from the cash portion of the VMware to Broadcom stock conversion? Is this a eTrade practice or it is also happening with other brokage firms? Anyone know why is there a 30% withholding tax when W-8 Ben is in placed for non-US person? And more importantly is there anyway that we get tax refund?
5 replies (most recent on top)
@ayf+1pUJRWiO it depends on the treaty your country has
i just went off the chat with etrade and they confirmed that the withholding happened in lines of the treaty for dividends. Checked my numbers and they add up to what i could find in the treaty document.
if it actually was to be treated as 'dividend' is quesitonable for me but not sure if we can do anything about it
It's an incorrect tax taht should not have been applied
Rang etrade and they said VMWARE advised to treat Cash conversion as as Dividends payment which is clearly wrong. Raise help now tickets folks or you might not get this back
Apparently E*trade were told by VMW/BC to withhold for every stockholder, not exempting non-US folks like they should have.
I know many have told them all parties they got it wrong.
I think this is a mistake, the W8Ben form is to exempt payment of tax to the US if the country where the alien has a tax treaty with the US. I think that is how I understand it, essentially you only pay tax in your own/residing country.
NRA tax refers to Non Resident Alien tax.
No different from withholding for residents.