U.S. market activation
To start trading in U.S. market you must have a valid U.S. tax authority set W-8 BEN form, provided through GLOBE TAX SERVICES, INC. (herein after - GlobeTax). After registering with GlobeTax and signing W-8 BEN form you will receive confirmation email. For activation U.S. market forward the confirmation email to Luminor Bank investorEE@luminorgroup.com.
Luminor Investor clients, who choose to use GlobeTax services, U.S. registered financial instrument dividends will be charged with 15% withholding tax instead of standard 30%, if dividends are received by non U.S. resident. The reduced 15% withholding tax will be applied approximately after two weeks from the form confirmation. The service must be valid before the dividends ex-date.
Register at GlobeTax eCerts system: ecertsus.globetax.com
Access Code – USDOCS56
User ID – Luminor Investor User ID
Service is provided by GlobeTax and fee of 35 USD for 3 years is applied. More about Globe Tax and their services: www.globetax.com.
As soon as GlobeTax receives relevant filled form, your documentation will be evaluated and you will be notified if you're eligible for tax relief. After confirmation, in two weeks, dividends received from U.S. registered financial instruments will be credited to your Luminor Investor account with 15% tax instead of 30%.
When you receive a confirmation email from GlobeTax, please forward it to investorEE@luminorgroup.com.
Frequently asked questions
1. What are benefits of this service?
Dividends paid by U.S. companies will be taxed by reduced 15% withholding tax (standard 30%).
2. How much does it cost to register with GlobeTax?
35 USD for 3 years. It is less than 12 USD per year.
3. If I register today, will IRS reporting fee of 90 USD will be applied?
If you already received dividends form U.S. companies this year and there was no valid your W-8 BEN form at GlobeTax, then after tax year end Luminor Bank will have a duty to report your income to IRS and will charge you 90 USD fee till the end of 2nd quarter of the following year.
If all the U.S. income during full year were received after form W-8 BEN is submitted, then IRS reporting fee 90 USD will not be charged from you.
4. When this service becomes active?
Once GlobeTax receives your registration form by mail and confirms successful registration, within two weeks dividends received by U.S. companies will be taxed by 15% withholding tax.
5. How long this service is valid?
W-8 BEN becomes active from the submition moment and stays valid for next three calendar years. E.g. after you sign and submit the form W-8 BEN in year 2020, the service will be valid till 2023.12.31. Before the form expiration please submit updated form.
6. How to register to GlobeTax?
Registration instructions are here.
Pursuant to the U.S. regulations, every foreign financial intermediary is required to submit the information to the US tax institution Internal Revenue Service (IRS) on its customers that earn income in the U.S.. The income is treated as the distribution of US companies’ profit: dividends and similar payments. U.S. company is understood as the company registered in the U.S., or a foreign company with the major proportion of its income earned in the U.S.. Financial instruments are corporate shares (stocks) and/ or exchange traded funds (ETFs).
Luminor Bank fulfils its duties and every year completes and submits the required forms to IRS. Because of such reporting Luminor Bank incurs certain costs, therefore the annual reporting fee shall be applied to the customers that have received the above income during the fiscal year.
The fee is not applied when GlobeTax double taxation avoidance service is used and form W8-BEN submitted to GlobeTax. For more information see previous chapter "Activate U.S. market trading and pay 15% instead of 30% on dividends from U.S.".
Fee shall be paid once a year on 2nd quarter. Luminor Bank shall charge this fee from the customer’s trading account, in case of insufficient funds, from the client‘s account in Luminor Bank. Funds in client‘s account will be converted into US dollars based on the currency exchange rate of that date set by the ECB.
Dividends and coupons from foreign financial instruments are taxed by standard foreign country’s withholding tax rates and can be over-taxed. There are cross border government double taxation avoidance (further – DTA) agreements which set lower withholding taxes. Luminor Investor clients, who choose to use GlobeTax "Tax Reclaim Service for Beneficial Owners" services are able to reclaim the difference between the standard withholding tax rate and the rate set in the DTA agreement.
Register at GlobeTax eDocs system here.
Access Code: 12C953BDNB
User Login Name: Luminor Investor user ID
Annual Account Fee: US$200 per income year per beneficial owner to acquire and manage your documentation. If GlobeTax recover less than US$400 in any income year (net of the GlobeTax fee) they waive this fee.
Service is provided by GlobeTax and fee is applied once funds are recovered. More about Globe Tax and their services: www.globetax.com
Frequently asked questions
What are benefits of this service?
You may be able to reclaim part of your withholding taxes.
When will claims be filed?
Reclaims are generally filed within two weeks
How long will it take for my refund to arrive?
It can take a few months. Do not expect refunds in a few weeks.
How does it work?
Using eDocs platform GlobeTax gets documents from you. GlobeTax specialists analyses the income, identifies where you have been over-taxed and uses the documentation you provided to calculate and submit a tax reclaim.