Withholding Tax is applied to investment income from a number of markets outside of the UK, for example, dividends received. The tax is withheld at the source of income and paid to the tax authorities where the company is incorporated.
The chargeable rate depends on the source country and the type of income that is paid. The table below lists some examples of typical tax percentages according to the source country. It is important to note that these figures are indicative and should, therefore, be used only as a guideline. If you receive any investment income inclusive of Withholding Tax, this will be highlighted in your investment income email once received.
Source Country | Typical Withholding Tax Rate* |
Finland | 30% |
Germany | 26.375% (inclusive of Solidarity Tax) |
Netherlands | 15% |
Austria | 27.5% |
Belgium | 30% |
Portugal | 35% |
*Please note that some rates may vary and are susceptible to change.
If you should have received a lower tax rate, due to a tax treaty, you can attempt to reclaim part of the withholding tax by contacting the tax authorities in the source country.
For example, when it comes to US stocks, the W-8BEN form in-app reduces your Withholding Tax from 30% to 15%. You'll need to sign this in-app before you're able to purchase US stocks and shares.
Freetrade doesn’t assist with the reclaim of Withholding Tax as it is a very complex and time-consuming process. Each source country has a different reclaim process and the complexity of the process varies.
Note: The displayed rates are indicative.