How to trade Internationally (U.S Taxes, Fees, etc.)

[Tommo4523]

Hi everyone,

I am new to trading and would like some advice on getting in to the international market, specifically the U.S. I have an international nabtrade account and I am aware that there are FX Spreads, brokerage fees and custodian fees but I cannot find specifics on taxing and anything else I might need to set up. I understand there is double taxation laws but I am not sure how they apply to trading and the specific numbers involved. I am also wondering all the things I need to set up before I start trading, i.e. forms for tax, documents needed, things that the IRS or ATO requires and also just how to manage an international account in terms of how and when to pay tax and anything I need to do once I have holdings. I have no idea if this sort of question gets answered often and I am sorry if this is a common question if anyone has links to another thread that would be great, otherwise any advice is appreciated.

Thanks Tom,

 

[Value Collector]

Hi everyone,

I am new to trading and would like some advice on getting in to the international market, specifically the U.S. I have an international nabtrade account and I am aware that there are FX Spreads, brokerage fees and custodian fees but I cannot find specifics on taxing and anything else I might need to set up. I understand there is double taxation laws but I am not sure how they apply to trading and the specific numbers involved. I am also wondering all the things I need to set up before I start trading, i.e. forms for tax, documents needed, things that the IRS or ATO requires and also just how to manage an international account in terms of how and when to pay tax and anything I need to do once I have holdings. I have no idea if this sort of question gets answered often and I am sorry if this is a common question if anyone has links to another thread that would be great, otherwise any advice is appreciated.

Thanks Tom,

When you get paid a dividend by a USA company, they IRS will take 15% of it, then the Australian government will want to Tax that dividend at your marginal tax rate, however they give you a tax credit for the amount you have paid to the USA

eg. XYZ company pays you $100 in dividend, The IRS will with hold $15 from you and deposit the remaining $85 in your bank account.

but when you do your Australian Tax return you report the entire $100, The Australian Tax office might then say you owe $35 tax on the dividend (if your marginal tax rate Was 35%), but they recognise the $15 the Americans took and give you a $15 tax credit, so out of the $35 Aussie tax you owe you actually only have to pay $20 to the ATO and $15 is covered by the tax credit.

———————
The IRS won’t charge you capital gains tax, But the Australian tax office will based on the capital gain you made In Australian dollars.