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Author: Setar One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 120807  
Subject: Taxes on Dividends for foreign investors Date: 5/31/1998 10:49 AM
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`lo everyone!

I`m currently trying to figure out which taxes on dividends from stocks I`m required to pay.

Datek required me to fill out a W-8 Form - Certificate of Foreign Status (the W-9 equivalent for nonresident aliens). Thus I receive dividens in full without the usually required backup withholding of 31%. No TIN was required for this process.

Right now I`m trying to get the same status for two of my DRP accounts. Reading the instructions supplied with the new forms it say:

`Caution: Form W-8 does not exempt the payee from the 30% (or lower treaty) nonresident withholding rates`.

Question is: What is the difference between this withholding and the backup withholding mentioned above? At a later point it says:

`Any distribution or payment of dividends by a US corporation sent to a foreign address is subject to the 30% (or lower treaty) withholding rate, but is not subject to backup withholding.`

So, is there a way to avoid paying those taxes? I`m currently a student and thus not subject to taxes on dividends within Germany. Any hints or a pointer to further information would be highly appreciated :)


Oliver

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