Dividend withholding procedures for foreign stocks traded in Japan

Foreign stocks listed for trading in Japan which issue dividends will have the cash dividend allocation subject to an increased withholding tax rate. The tax will vary based on the domicile of the stock issuing the dividend; however in general the withholding rate will be the highest withholding rate applicable and will not incorporate a reduction based on prevailing tax treaties.

This treatment is due to the tax reporting status of Interactive Brokers's clearing agent. As our clearing agent is unable to process the relevant tax declaration documentation which would allow for the application of tax withholding at a reduced rate, shareholders will be subject to the highest rate.

In order to avoid the application of the tax withholding on the dividends of foreign stocks, positions in such dividend paying stocks should be closed prior to the ex-dividend date.

We recommend that customers consult with their tax advisor for assistance in determining the eligibility, if any, for a tax credit on this withholding.

A list of foreign stocks and their applicable rates is provided below. Please be aware that the below is for informational purposes only and may not include all stocks which may be subject to the higher withholding rates.

Stock Code Stock Name DividendTax Rate
1773 YTL Corporation Berhad 25%
3827 Japaninvest Group plc N/A
4589 Acucela Inc 30%
4850 The Dow Chemical Company 30%
4875 MediciNavalnc 30%
5412 POSCO 22%
8634 JPMorgan Chase & Co 30%
8648 Bank of America Corporation 30%
8685 American International Group Inc 30%
8686 Aflac Incorporated 30%
8710 Citigroup Inc 30%
9399 Xinhua Finance Limited N/A