Hi whafa!Not all foreign stocks withhold taxes; those with the right tax treaties with the US do not ( great Britain, for example ):http://seekingalpha.com/article/248039-withholding-tax-rates...However, even with tax treaties that limit withholding, there can be variances between brokerage houses:..Most countries have tax treaties with the U.S., which may help bring down the tax rates for investors in foreign dividend stocks. But in some cases, the tax rates may differ from broker to broker, since each broker must file paperwork with foreign authorities. In some cases, individual investors can also choose to take this route to receive a discounted rate.In the end, foreign dividend stocks can be tricky business for investors. But in general, it’s important to remember a few key points when investing in foreign dividend stocks:•The U.S. offers a foreign tax credit for investors who are at risk of double-taxation by paying dividend taxes to both a foreign country and the U.S.•Retirement accounts are not eligible for the foreign tax credit, since they would not have otherwise owed the taxes in the U.S.•Investors should ask their brokers to learn about dividend tax rates in different countries, since the rates vary between country and even financial institution....http://internationalinvest.about.com/od/gettingstarted/a/For...Bottom Line: 1.If a given foreign stock with holds taxes, it's best held in a taxable account....if you want to get credit for foreign taxes paid.2 Always ask your broker what their withholding rate is on a given foreign stockCheers!MurphHome Fool
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