IB Tax Form Users Guide

Introduction

This Users Guide is intended to assist introducing brokers with answering questions your clients may have when completing the online IB Tax Form. Individual and joint accounts having tax information requiring update will be presented with the form immediately upon login to Account Management. For joint accounts, each account holder needs to provide his or her personal information and complete an appropriate tax form. Organization and trust accounts will complete the form through an updated online account application made available through your Account Management Dashboard. Applicable sections of the form will be pre-populated with information on record and the form should therefore only take a few minutes to complete. Completion of the form in a timely manner is critical to ensuring that both U.S. and non-U.S. taxpayers are not subject to any exceptional U.S. tax withholding and non-U.S. taxpayers receive the most favorable rate on dividend withholding as defined by U.S. treaties. As a result, the form cannot be by-passed upon client login and no other Account Management functions will be accessible until completed.
 
To notify your clients about this online Tax Form and request that they log into Account Management to complete it, sample communication templates suitable for sending to each of your U.S. (Exhibit I) and Non-U.S. (Exhibit II) clients have been included in the Exhibit section of this document. Note that once the Tax Form has been completed, it will be reviewed by IB for purposes of verifying the client’s stated tax residency which, depending upon the information submitted, may require the client to complete additional tasks (e.g., explain responses or send supporting identity and/or address documentation). As IB will have no direct communication with your clients as part of this process, you will need contact the client to complete these additional tasks and forward required documentation to fatca@interactivebrokers.com. To assist you with managing communications and tracking status, IB will be sending periodic reports to your Message Center listing any clients having tasks pending completion and the nature of those tasks. 
 
IB Tax Form Screen Overview
Screen 1
The first screen which the client will be presented upon login to Account Management contains basic account identifying information provided by the client at the point of application or updated through Account Management thereafter. The information presented is as follows:
 
Section 1: Name and Address – the Salutation, First Name, Middle Initial, Last Name and Suffix fields are pre-populated and cannot be changed on this form. If any of this information has changed, please continue with form and when complete navigate to the Settings, Account Settings and Profile sections to make changes. Changes to permanent and mailing address and telephone number are allowed.
 
Warning! Certain changes will require verification documents from the client.
 
Note:    The presence of (i) U.S. telephone number and no non-U.S. number, (ii) a U.S. address (mailing or permanent), or (iii) U.S. place of birth are considered U.S. tax connections. Explanations and further follow up documentation from the client are required when these connections are found.
 
The presence of an address in Jersey, Isle of Mann, Guernsey and Gibraltar is UK indicia flag if the client does not indicate tax residency in the corresponding country. Explanation and further follow up documentation may be required from the client.            
 
Section 2: Phone Number(s) – allows update and addition of phone numbers by type (home, work, mobile fax). For each number entered, specify country of issuance and number. If phone type is mobile and you which to receive test messages check “Use for Messaging” box. An optional entry for preferred times of contact may be specified by clicking on the Time button.
 
Note: We understand that many clients us a U.S. mobile number for simplicity and ease of communication.  While understandable, failure by the client to provide a secondary, non-U.S. telephone number will result in the account being flagged for further review.
 
Section 3: Application Information - Date of birth, country of citizenship and country of birth will be prepopulated if IB has this information on file. These are required fields which require client entry to proceed.
 
Note:    U.S. citizenship is considered a U.S. tax connection and requires disclosure of U.S. tax residency and a social security number. 
 
U.S. place of birth is considered a U.S. connection if the client does not indicate U.S. citizenship. Explanation and further follow up documentation from the client is required when this connection is found.
 
Section 4: Tax Residency - The client must disclose the jurisdictions where the client is tax resident and the tax id associated with that residency if applicable. The second tax jurisdiction is an optional field although entries which are clearly erroneous will not be accepted. Additionally, we have programmed rules for the collection of tax ids in certain countries. For example a U.S. social security number has 9 digits and all are numbers. If a client fails the logic, the system will not accept the tax id. If the client is having a problem inserting tax ids, this could be the reason.

Client should hit “Submit” button after all personal information is completed. Assuming no entry errors have been made, the client will be directed to Page 2 (tax form).

Screen 1

 

 

Screen 2 (W-9)
The second screen which the client will be presented will be the W-9 or W-8BEN tax form, whichever is applicable, based upon information provided on the prior screen.  For example, a W-9 will be shown if the client selects U.S. tax residency (even if another tax residency was disclosed). Note that information on the W-9 will be pre-populated and cannot be edited.

Important: To change the pre-populated information on the W-9, the client MUST hit the back button and change the relevant information on the prior page for the tax form to be updated.

  

In the Part II Certification section of this screen, the client will need to review and check the boxes that apply.

Important: The first 3 boxes on the W-9 under certification must be checked to avoid having the client subject to back up withholding.

 

 

Next, the client will need to provide an electronic signature by typing their name (i.e., account title) exactly as it appears on the screen and select the “Save and Continue” button. The client will then be taken to the confirmation screen which will list any documents that they need to send to the broker.


 

 

Screen 2 (W-8BEN)
A W-8BEN will be show if the client selected any tax residency other than U.S. At the top of the tax form will be shown any U.S. or U.K. connections (e.g., U.S. address, telephone number, place of birth or crown dependency address) identified and tasks necessary to resolve it.
 
Example of U.S. address / telephone number problem
 
 
Example of U.S. place of birth.
 
 
The client must answer the questions by selecting the appropriate radio button. Many of these require document submissions to resolve the connection and the condition is not resolved until the appropriate documentation is provided. If a document is required, the client will be notified of this information once the form has been completed.
 
Information on Part I of the W-8BEN will be pre-populated based on the information provided on the prior page. Generally, the information cannot be edited with the exception of U.S. taxpayer identification number. This may be updated by the client.
 
Important: The client MUST hit the back button and change the relevant information on the prior page for the tax form to be updated.
 
 

On Part II of the W-8BEN the client will be prompted to specify whether they are a resident of a country which maintains a tax treaty with the U.S. Only those countries with which the U.S. maintains a treaty will be shown on the drop-down list and if the client does not see his or her treaty country, the client should select “N/A” or “I am not resident in a treaty country.”

Important: The system will flag a problem if the client’s mailing or permanent address is outside the treaty country which they have specified. In this case, the client will need to explain the reason for the non-treaty country address on the form and will be prompted afterwards to submit a proof of address and proof of identity from the treaty country for the claim to be valid. Client who cannot comply will not be afforded treaty benefits per IRS rules.

 

 

On Part III of the W-8BEN the client will be prompted to certify that the information provided on the form is accurate by checking the boxes and providing an electronic signature by typing their name (i.e., account title) exactly as it appears on the screen.

The client will also be prompted to acknowledge that the treaty benefits being claimed have remained unchanged since the date of their last tax form certification. This affidavit also requires entry of an electronic signature.

The client will then be prompted to check the box through which they consent to electronic collection and delivery of tax forms and then select the “Save and Continue” button. The client will then be taken to the confirmation screen which will list any documents that they need to send to the broker.

 

 

 

 

 

Final Review & Document Request

Once the form has been completed, it is subject to review by IB for purposes of verifying the client’s stated tax residency. This review may generate discrepancies in one of the following three areas: U.S. Connection, Treaty Claim or U.K. Crown Connection. If a client account is flagged for any discrepancy, you will need to contact them and request documents to resolve. The steps for resolving each of these is as follows:

 
1. U.S. Connection – Clients who complete the Form W-8BEN and have indication of a U.S. connection either from entries provided on the form or through a review by IB of the client’s records, will need submit proof that they are not a U.S. taxpayer. The proof varies by connection type and are as follows:
 
a. U.S. Person – if there is indication of U.S. citizenship or place of birth, the client must provide a copy of:
- Valid non-U.S. passport, AND
- Certificate of Loss of Nationality of the United States (Form DS-4083) or
- Reasonable written explanation of your renunciation of U.S. citizenship, or
- Reasonable written explanation that you did not obtain U.S. citizenship at birth.
 
b. U.S. Address – if there is an indication of a U.S. mailing address, permanent address or telephone number, the client must provide a copy of:
- Proof of non-U.S. identity document, AND
- Proof of non-U.S. address (less than 12 months old), AND
 
c. Explanation for U.S. address. One of:
- I do not meet the substantial presence test for U.S. residency as defined in U.S. Treasury Regulation § 301.7701(b)-1(c). In your response, please provide IB with the total number of days you are (intend to be) present in the United States in the current calendar year and the total number of days you were present in the United States in each of the 2 preceding calendar years. This computation is subject to verification by IB.
 
- I meet the closer connection exception described in U.S. Treasury Regulation § 301.7701(b)-2. In your response, please state the country to which you have a closer connection and demonstrate how that closer connection is established. This claim must be verified for reasonableness by IB.
 
- I am present in the United States as a student, teacher or trainee at a U.S. institution. Copy of F, J, M or Q visa from U.S. Immigration and Customs Enforcement is required.
 
- I am present in the United States as a foreign diplomat. Copy of your A or G visa (other than A-3 or G-3 visa) from U.S. Immigration and Customs Enforcement is required.
 
- I am present in the United States and am a spouse or unmarried child under the age of 21 of a person described in 2 prior bullets. Copy of visa required.
 
 
Important: If a U.S. Green Card is found, then W-8 tax status will only be allowed with IB’s consent.
 
If a U.S. passport is found, then W-8 status not allowed. The account will be considered a U.S. person and required to submit a W-9.
 
 
 
2. Treaty Claim - Clients who complete the Form W-8BEN containing a mailing address or permanent address outside of their stated country of tax residency will need submit proof of tax residency as follows:
a. Proof of treaty country identity document; AND
b. Proof of treaty country address (less than 12 months old): AND
c. Written explanation of non-treaty country address
 
 
 
3. U.K. Crown Connection - Clients who complete the Form W-8BEN containing a mailing address or permanent address located in either Guernsey, Jersey, Gibraltar or Isle of Man but did not indicate they are a tax resident of one of those regions will need to provide a reasonable written explanation for why they maintain such address.
 
 
Information and documentation to resolve problem must be sent to IB at fatca@interactivebrokers.com for confirmation.

IB will send a periodic report listing clients who have tasks which need to be completed so that you may contact them to act. This will include those accounts who have not logged into Account Management to complete the Tax Form or who have completed the form but need to send in documentation.

 

 

 

EXHIBIT 1 – Tax Form Prompt – U.S.

 

 

 

Immediate Response Requested
 

 

Dear Client,

 

A review of your account (Insert account ID) shows your tax information is out-of-date.Please immediately log into Account Management. You will be presented with information we already have on file as well as a tax form you should check, make corrections as needed, and then sign. This form will only be presented to the primary account owner, and should only take a few minutes to complete.

Confirming your information is essential to ensure that you will not become subject to backup withholding, including withholding on trade proceeds.

We appreciate your prompt attention to this matter.
 
 
 
 
 
Immediate Response Requested
 
Dear Client,
 
A review of your account (Insert account ID) shows your tax information is out-of-date.
Please immediately log into Account Management. You will be presented with information we already have on file as well as a tax form you should check, make corrections as needed, and then sign. This form will only be presented to the primary account owner, and should only take a few minutes to complete.

Confirming your information is essential to ensure that (a) we can give you the most favorable rate on normal dividend and interest withholding as defined by standard international tax treaties; and (b) you will not become subject to any exceptional U.S. tax withholding.

We appreciate your prompt attention to this matter.

 

 

 

 

Documenting Taxpayer Status - Non U.S. Persons with U.S. Addresses

The U.S. Internal Revenue Service generally considers individuals with certain U.S. connections to be U.S. resident taxpayers who are required to complete IRS Form W-9 and provide IB with a U.S. taxpayer ID (e.g., social security number).

One common indicator of a U.S. connection for individuals is the presence of a U.S. residential or mailing address. In these cases, the individual is assumed to be a U.S. taxpayer and required to submit Form W-9 unless they can demonstrate that the address falls under one of the permissible explanations for a U.S. connection.  These include:

(A)   You do not meet the “substantial presence test” for U.S. tax residency as found in U.S. Treasury Regulation 301.7701(b)-1(c) and the address in the U.S. is 

o    a secondary residence (e.g., vacation home).
o    of a business I/we own.
o    that of an addressee that forwards mail to my/our address in [insert treaty county] to ensure more reliable / secure delivery.
o    Other (please provide explanation)
 
Individuals relying upon this “substantial presence test” must also indicate the number of days they were present in the U.S. for each of the current and prior two year periods, including the remaining days in the current year that they intend to be in the U.S.  


(B) You meet the closer connection exception described in US Treasury Regulation § 301.7701(b)-2 and the address in the United States is 
 
o    a secondary residence (e.g., vacation home).
o    of a business I/we own.
o    that of an addressee that forwards mail to my/our address in [insert treaty county] to ensure more reliable / secure delivery.
o    Other (please provide explanation)
 
Individuals claiming that this subsection (B) applies, must state the country to which they have a closer connection and demonstrate how that closer connection is established. IRS Tax Form 8840 or your tax advisor may help you understand the closer connection test and how you could qualify.


(C) You are present in the United States as a student, teacher or trainee at a US institution. Here you will need to provide a copy of your F, J, M or Q visa from U.S. Immigration and Customs Enforcement.


(D) You are present in the United States as a foreign diplomat. Here you will need to provide a copy of your A or G visa (other than A-3 or G-3 visa) from U.S. Immigration and Customs Enforcement.

(E) You are present in the United States and are a spouse or unmarried child under the age of 21 of a person described in (C) or (D) above. Here you will need to provide a copy of your visa.

Note: the examples above are not the only permissible explanations for US connections. If none of the examples apply to your situation but you still believe you are a non-US taxpayer, you will need to provide a written explanation supporting your claim of non-US status

1099-B Proceeds From Broker and Barter Exchange Transaction

Proceeds from broker and barter exchange provides the sales proceeds from multiple transactions, including sales, exchanges, covered options, and tender offers on page 2 of the Consolidate Forms 1099.

 

1099-B Proceeds from broker and barter exchange reporting is made up of four separate sub-sections on the 1099-B Summary Page.  The first three sections are separated based upon cost basis reporting regulations, while the fourth section includes Regulated Futures, Section 1256 contracts. 

  1. Covered Securities with Short-Term gains or losses.
  2. Covered Securities with Long-Term gains or losses.
  3. Noncovered Securities. 
  4. Regulated Future Contracts and Options.

IRS regulations classify covered and noncovered securities as outlined in the table below:

  Covered Securities Uncovered Securities
Broker/dealer vs. Tax Payer Responsibility Brokers/dealers report cost basis to IRS and taxpayer on Form 1099-B. Taxpayer will use From 1099-B data to prepare their tax returns. Taxpayer to maintain and report cost basis to IRS.  Includes assets designated as noncovered due to asset type or incomplete cost basis information.
Equities Acquired on or after January 1, 2011 Acquired prior to January 1, 2011
 
Mutual Funds Acquired on or after January 1, 2012 Acquired prior to January 1, 2012
Fixed Income and options Acquired on or after January 1, 2014 Acquired prior to January 1, 2014

 

 

1099-B Summary Page

Transaction details appear following the Consolidated Forms 1099- Summary page.  Boxes 1d to 1g of the 1099-B report the combined total for securities classified within sections one through three.  Interactive Brokers includes cost basis reporting to the IRS for covered securities.  Noncovered securities are exempt from broker cost basis reporting due to either designation or unknown information.

 

1099-B Sub Sections

1. Covered Securities with Short-Term gains or losses

Section one reports proceeds and cost basis information for covered securities with a short-term gain or loss.  Grouped by their unique security identification number (CUSIP or ISIN), these covered securities correspond with the Worksheet for Form 8949 Part I Short-Term Capital Gains and Losses - Assets Held One Year or Less, Box A

Box 1e reflects the original or adjusted cost basis.  If applicable, a cost basis adjustment code may appears under Box 1f within the section's transaction details that follow the Summary.

2. Covered Securities with Long-Term gains or losses

Section two reports information for transactions of covered securities with a long-term gain or loss.  Also grouped by security identification number, these assets correspond with the Worksheet for Form 8949 Part II Long-Term Capital Gains and Losses - Assets Held More Than One Year, Box D.

3. Noncovered Securities

Section three reports transaction of non-covered securities including index options without determination of holding period.  Securities under this section include transactions for which the cost basis is not known or not reportable by Interactive Brokers to the IRS.  Based on personal records, the taxpayer must report the cost basis and determine the short or long term.

These assets correspond with the Worksheet for Form 8949 Part I Short-Term Capital Gains and Losses, Box B, as well as Part II Long-Term Capital Gains and Losses, Box E.

4. Regulated Future Contracts and Options

We are required to report the aggregate profit/loss in four components under Boxes 8 to 11, even though taxpayers only report the aggregate profit/loss from regulated futures.

All settled or closed contracts during the tax year are displayed in Box 8.  Any unrealized profit or loss at the beginning of the year (Box 9) and at the end of the year (Box 10) is adjusted from Box 8 to report an aggregate profit or loss on all contracts, open or closed, in Box 11.

For a contract level profit and loss summary, we include a Gain/Loss Worksheet for 1256 Contracts as part of our Year End Reports.  There is one section for Futures and one section for Options. 

 

Important Points

  • Wash Sales: Brokers take into wash sales with calculating cost basis and holding period for covered securities within an account.  The amount of the disallowed loss and the subsequent cost basis adjustment will be reported.  For an understanding of wash sale basics, click here.
  • Bond/Option: Bond and option purchases became covered securities as of January 1, 2014.
  • Form 8949 Worksheet: Transactions not reported to the IRS on Form 1099-B may be included on your 8949 Worksheet, along with details for each 1099-B transaction.
  • Multiple Trading Account: Each of these reports is specific to the account associated with the report, however the tax code requires you to report on your tax return across all of your trading accounts. If you hold the same security in multiple accounts and sell it, the gain or loss calculated and reported to the IRS may be different than presented on an account level and must be adjusted.
  • Tax ID Numbers: An IRS identity protection ruling allows truncated reporting of tax ID numbers on 1099s.  Account tax ID numbers display the last four digits (XXX-XX-0123) on Interactive Brokers tax forms. 

 

 

Note:

IRS Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

1099-MISC Miscellaneous Income

Miscellaneous Income represents those amounts not reportable on any of the other 1099 forms.  In addition to royalty trust and payments in lieu, amounts may include reimbursements.

 

 

Royalties

Box 2 reports income credited to your account from royalty trusts.  Payments of royalties are generally from investments in natural resource companies.Supplemental tax information is furnished for this income on the WHFIT Tax Information Statement by March 15.

Other income

Box 3 reports income credits classified as "other income" for tax purposes.  This includes stock loan fees earned.

Non-Employee Compensation

Box 7 reports reports asset management fees earned.

Substitute Payments in Lieu of Dividends or Interest (PIL)

Box 8 reports PIL payments credited to your account during the previous calendar year.  The amounts were credited in lieu of  the normal interest or dividend payment when your security is lent.  As disclosed within your margin disclosure, your broker is authorized to loan your shares from an account with an outstanding margin debit balance. (Note: PIL payments are not eligible to be treated as qualified dividends, except under specific circumstances.)

Important Points on PIL Income:

  • The PIL income (credited to your IB account) cannot be “netted” with PIL paid (debited from your IB account) on stocks you have borrowed.
  • PIL is not eligible to be treated as qualified dividends, except under specific circumstances
  • PIL income is not an interest or dividend payment, but miscellaneous income and should be treated as such on your tax return.

 

 

Note:

IRS Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

1099-DIV Dividend Income

Dividend and Distribution Income received by you from securities are reported on the 1099-DIV, The corresponding transaction details in the annual Dividend Report breakout dividends earned by tax category, which is available in Account Management from the Reports > Tax > Tax Forms page.  

 

 

Total Ordinary Dividends

Box 1a includes all dividend distributions from stocks, mutual funds, REITS, and UITS by U.S. and non-U.S. issuers.  This includes money market and bond dividend income.

Short-term capital gains distributions paid by mutual funds are included under Box 1a, but not under Box 2a.

Qualified Dividends

Box 1b reports the portion of total ordinary dividend income from Box 1a which may be eligible for qualified dividend treatment. Qualified dividends are taxed at the Long-term Capital Gain (LTCG) tax rate (0%, 15%, & 20%).  Consult a qualified tax adviser to verify your eligibility.

Total Capital Gains Distributions

Box 2a reports any long-term capital gain distributions paid by mutual funds and REITS.  Short-term capital gains distributions are reported under Box 1a.

Unrecaptured Section 1250 Gain

Box 2b includes real property depreciation recapture from the capital gains distributions under Box 2a, if any.  

Non-dividend Distributions

The total amount of payments classified as a return of capital paid to you is reported in Box 3.  A reduction to the cost basis of security is occurs.  This may include mutual funds, REITS, WHFITS, and corporations.

Federal Income Tax withheld

Any U.S. income tax withheld from a dividend distribution is reported under Box 4.

Investment Expenses

Your portion of investment expenses from UIT, WHFIT, and WHMT investments is reported under Box 5.   These expenses may be deductible, subject to the 2% limitation.

Foreign Tax Paid

Box 6 reports foreign tax paid, including foreign tax withheld from foreign source dividends.  This is usually attributed to a mutual fund's investment in foreign securities.  As a supplement to assist with your tax preparation, a summary of foreign dividends and tax paid on them is displayed on the annual Dividend Report.

Liquidation Distributions

Reducing your cost basis, Boxes 8 and 9 report payments as a result of  mergers or acquisitions.  Any amount of a cash payment not classified as a dividend or exceeding your basis is considered a capital gain.  Non-cash payments are a return of your investment and reduce your basis.

Exempt Interest Dividends

Generally, dividends paid by tax-exempt bond funds are listed on Box 10.  Any portion of Box 11 payments classified as Specific Private Activity Bond Interest reported to calculate AMT.

 

 

Note:

IRS Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

 

Circular 230 Notice:
Important: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

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1099-INT Interest Income

Interest Income received from taxable and tax-exempt earnings are reported on this form.  This includes domestic and foreign bonds, municipal bonds, mutual funds, as well as other interest payment sources.

 

 

Interest income

Box 1 reports interest income, exclusive of U.S. savings bond and U.S. Treasury obligations interest.  The transaction level details are provided on other year-end activity statements and reports.

U.S. savings bonds and treasury obligations

Box 3 reports interest from U.S. savings bonds and US Treasury obligations. US savings bond and treasury obligation interest is separated for state tax reporting. Interest on these obligations is generally not subject to state tax.

Federal income tax withheld

If the IRS has notified us that income tax must be withheld (backup withholding) on interest income in your account, the tax withheld amount will be reported in Box 4.

Note: Interest payments details are part of the supplemental information on the Consolidated 1099.

Investment Expenses

Box 5 reports investment expenses from real estate mortgage investment conduits (REMIC) income.

Foreign Taxes

Boxes 6 and 7 pertain to both any foreign tax withheld from interest income and the associated foreign country code.

Tax-exempt interest

Interest payments not subject to federal taxation, such as municipal bonds, are reported under Box 8.  Accrued interest paid: Provided in supplemental information on consolidated 1099 – reduce the amount of reported interest by interest paid.

Any amounts reported in Box 8 subject to the Alternative Minimum Tax (AMT) is reported in Box 9

Market Discount & Bond Premium

 The market discount and bond premium for taxable and tax-exempt bonds are reported as separate sub-totals in Boxes 10, 11, and 13.

 

 

Note:

IRS Circular 230 Notice: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.

Tax Reporting: When are 1099s and other tax forms issued?

For U.S Persons

Consolidated 1099:        On or before February 15
Form 1099-R:               On or before January 31 every calendar year
Form 5498:                  No later than May 31 of each calendar year.
Form 2439:                  90 days after fiscal year end of RIC or REIT (On March 31 for December 31 year-end)
NR-4 (Canadian form):   On or before March 31 for the immediately preceding year.
 
For Non-U.S persons (Nonresident Alien)
1042S:                       On or before March 15 every calendar year
NR-4 (Canadian form):   On or before March 31 every calendar year
 
For Canadian Persons
T-5                          On or before February 28 for the immediately preceding year
T-5008                     On or before February 28 for the immediately preceding year
RL-3                         On or before February 28 for the immediately preceding year
RL-18                       On or before February 28 for the immediately preceding year
T-3                         On or before March 31 for the immediately preceding year
RL-15                       On or before March 31 for the immediately preceding year
RL-16                       On or before March 31 for the immediately preceding year
1042S:                     On or before March 15every calendar year
 
Note: if these dates fall on a weekend on holiday, the form will be issued on or before the next business day.
 
Often IB receives information on dividends and return of capital after the consolidated 1099 is issued. If we amend your consolidated 1099 to reflect this new information, we will send you an e-mail alert to let you know that there has been a change. The changed 1099 will be marked “amended” with the date.  Please check periodically and reprint your latest consolidated 1099 when you prepare your taxes.

Italian regulations on capital gain taxes

All financial income received by an Italian resident individual investor will be subject to a tax rate of 26% (decreto legge 66/2014 and coordinated conversion law 89/2014). This general rule does not apply to financial income from investments in Italian Government securities (bonds and other securities pursuant to art. 31 DPR 601/1973) and equivalent products resulting from Government securities of foreign states belonging to the White List. These products shall continue to be subject to a reduced tax rate of 12.5%.

Italian tax laws impose the withholding at source on ETFs that are collective investment schemes (UCITS). This designation is applicable to the ETFs currently listed on the Italian Stock Exchange Market ETFPlus.

  •  Withholding rate of 26% for ETFs listed on the Italian Stock exchange market (IBKR market symbol: BVME.ETF) is taxed at source.

Tax on capital gains for stocks is applied as follows:

  • Customers with Italy as their country of residence (or as country of incorporation in case of entity accounts) who are trading in stocks are subject to capital gain tax. As IBKR applies the Regime Dichiarativo only, IBKR is not required to withhold capital gain taxes from customer accounts directly. Customers would be responsible to discuss with their tax advisor on their individual reporting requirements in accordance with Italian laws. 

Available IBKR exchanges for Italian markets:

  • BVME: Available to all IBKR customers for Italian stocks.
  • BVME.ETF: ETFs that are collective investment schemes (UCITS) listed on the ETFPlus market are not available to Italian residents to trade. 

 

Information For IBKR Clients Relating to the Spanish Tax Form 720

Interactive Brokers wishes to supply the following information which may be useful for our Spanish residents when completing the required Form 720 for the Spanish Tax Authorities.


The legal entity that holds the accounts is mentioned in the upper part of the Activity Statements. Accounts of clients resident in Spain are held by:

Interactive Brokers Ireland Limited
10 Earlsfort Terrace
Dublin, D02 T38
Ireland

The tax identification number of Interactive Brokers Ireland Limited is 3674050HH. It is regulated by the Central Bank of Ireland (CBI, reference number C423427), registered with the Companies Registration Office (CRO, registration number 657406), and is a member of the Irish Investor Compensation Scheme (ICS).

 

Routing instructions for depositing funds are determined based on the denomination of the currency you are depositing and the IBKR entity through which your account is held. Routing instructions are made available after creating a deposit notification via Client Portal under the Transfer & Pay menu followed by Transfer Funds.

Should you require information regarding the average cash balance in your account, you may create a Flex Query through Client Portal by navigating to Reports followed by Activity and Flex Queries.

You may similarly run a Flex Query within Client Portal in order to obtain ISIN information for non-US assets. IBKR does not provide customers with ISIN information for US securities; however CUSIPs may be obtained through a Flex Statement query provided the account has subscribed to the CUSIP Service, available for USD 1.00 per month for non-professional accounts. Customers requiring ISIN data for US securities may obtain such information from company websites or internet searches.
 

Please be aware that Interactive Brokers does not provide information to the Spanish government directly relating to Form 720. Customers are responsible for all reporting aspects and should consult with their tax advisor for any assistance in completing the required documentation.
 

Information Regarding the Italian Financial Transaction Tax

概観: 

This document is designed to provide an overview of how the Italian Financial Transaction Tax (I-FTT) will be handled by Interactive Brokers.

Effective March 1, 2013, a new tax has been implemented on the purchase of certain Italian securities.

Effective September 1, 2013, a new tax will be implemented on the purchase and sale of certain Italian derivatives.

 

Tax Rate

The tax rate for the year 2013 will be 0.12% for shares transacted on regulated markets and MTFs and 0.22% for those transacted outside of these markets. The tax rates are to decrease in 2014 to 0.10% and 0.20% respectively.

The acquisition of the underlying stock upon exercise or delivery of a derivative instrument will be subject to the higher (0.22% in 2013) rate.

Scope

The I-FTT will be applied to shares provided the issuer is resident in Italy. In addition, the I-FTT will be applied to securities representing shares issued by companies resident in Italy (example American Depository Receipts).

The acquisition of shares whose average market capitalization in November of the previous year was less than EUR 500 million will not be subject to the tax.

While at this time the Italian Tax Authorities have not defined corporate actions for which the acquisition of shares may be subject to the I-FTT, traders should be aware that as information is released, IB will assess taxes as required.

Calculation Method

The tax will be calculated on the net settlement per ISIN per final beneficiary per day. The net long share quantity will be multiplied by the average price of the purchase shares. Securities with identical settlement dates will be netted together for the determination of the tax.

In the event the net settlement includes transaction executed both on and off regulated markets, a blended tax rate will be used. For example

Location Purchase Quantity Sale Quantity Price Net Quantity
Regulated Market / MTF 10 15 50 (5)
Other 15 5 51 10

The final net position of the above transactions is 5

Weighted average purchase price = (10*50 + 15*51) / 25 = 50.60

Tax Base = 5 * 50.60 = 253

Average Tax Rate = (15*0.22% + 10*0.12%) / 25 = 0.18%

Tax Due = 253 * 0.18% = 0.46 EUR

The tax may be due on either the actual settlement date or the contractual settlement date of the transaction. IB intends to calculate the tax based on the contractual settlement date, which on most European venues is T+3 with the exception of the German markets where it is T+2. Please contact IB should you wish to discuss changing this default.

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