Taxes, ETFs, foreign countries

5 posts in this topic

 

Hi guys! I am looking for some advice regarding taxes. I want to start investing into ETFs (85% in a FTSE All World and 15% into a Europe Small Caps ETF). I want to start with 10.000€ and continue with a savingsplan (200€/month). I am currently living in Germany, but I am originally from another EU-country. I am planning on staying in Germany for around 4 years and probably go then for 2 years to Australia or into the US and then probably back to where I am originally from. 
My question now is:
Should I invest in distributing etfs for now and take advantage of the German ,,Sparer-Pauschbetrag,, (where until 801€ of revenue/year there are no taxes) and close my account in Germany after moving to the US or Australia and make there a new account and then again a new one when I am back?

Or does it make sense to invest in cumulative etfs and take them with me wherever I go? But I think the problem is probably that I can’t transfer my etfs? I would have to sell, close my account and make in the new country a new account and buy there new etfs? Or are there any brokers where you can easily transfer your portfolio? I guess it would be easier to do that in the EU but not from EU to non-EU and back?

What I also thought of, was opening an account on my mother’s name since she is not planning to move anywhere and maybe after 20-30 years sign it over to my name? 

Thanks for your help!!!

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Maybe I will hijack this thread.

 

So I bought some US shares and now I have to fill in a form "Certificate of Foreign Status"

 

Has anyone bought US shares and has been asked to fill in the form?

 

There is a box which says Foreign Tax identifying number? Does anyone know what that is?

 

 

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7 hours ago, RenegadeFurther said:

Has anyone bought US shares and has been asked to fill in the form?

 

Every individual person who is claiming not to be a US citizen or resident (i.e. a Nonresident Alien, AKA Godless Furriner) is required to file a Form W-8BEN.  It is almost always advantageous to do so as it also allows you to claim the benefits of the applicable treaty rate of withholding.

 

If you do not submit it - and assuming the US bank doesn't force you to close the account - your dividends and other items of FDAP income will be subject to the statutory 30% rate of withholding.

 

7 hours ago, RenegadeFurther said:

There is a box which says Foreign Tax identifying number? Does anyone know what that is?

 

 

It is your foreign tax identifying number issued by the country in which you claim to be tax resident.

 

If you don't know what that is then you need to take a look at whatever foreign tax returns you may have filed recently.

 

Want the answers to all your W-8BEN questions?

 

Read the instructions:

 

https://www.irs.gov/pub/irs-pdf/iw8ben.pdf

 

 

 

 

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On 7/25/2021, 8:27:47, cmkk said:

But I think the problem is probably that I can’t transfer my etfs? I would have to sell, close my account and make in the new country a new account and buy there new etfs? Or are there any brokers where you can easily transfer your portfolio?

 

This is the crux of your problem.

 

ETFs like all funds can be difficult - if not impossible - to hold outside an account that is not domiciled in a country where the ETFs are admitted to trade.

 

But this is a problem only if the brokerage where you acquired the funds forces you to close your account when you change your residence.  Not all do.

 

But even if a brokerage does not force you to close your account it may prohibit you from BUYING any more funds that are "foreign" from the perspective of your new residence.  For example:  you buy a common ETF domiciled in the USA on your US brokerage account and then move to Germany where you open a German depot.  Your German depot may easily accept transfer of common stocks and bonds from your US account but probably not US ETFs - except in the rare case where the US ETF is also admitted to trade on EU exchanges.  Meanwhile, your US broker - if they learn of your change of residence - may either force you to close your account or restrict you from any further purchases of US ETFs or other funds.  They'll let you sell what you have but will not allow you to acquire more.

 

 

 

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18 hours ago, Straightpoop said:

 

 

It is your foreign tax identifying number issued by the country in which you claim to be tax resident.

 

 

 

Is this the same as my Tax ID on my pay slip?

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