From 1 August 2021 to 31 January 2022, National Settlement Depository (NSD) will waive the fee for receiving and recognizing the form of an individual’s identification for income payments on U.S. securities (Form W-8BEN).
A Form W-8BEN is a document that allows to reduce tax collected by the U.S. regulator on dividend and interest income on U.S. securities.
The form is completed by non-U.S. investors holding U.S. financial instruments. This makes it possible to avoid double taxation for most U.S. financial instruments and pay 13% in taxes on dividends: 10% to the U.S. and 3% to the Russian Federation. Otherwise, the higher income tax rate (30%) applies.
A Form W-8BEN remains in effect for three years.
“W-8BEN is extremely important to investors for proper management of their assets. In view of the popularity of U.S. stocks, the increase in their variety traded on the Moscow Exchange, and the strong inflow of retail investors, this becomes increasingly essential. To simplify the process, we have waived the fee for that service for our clients for the marketing period. We hope that this will help mainly newbie investors into U.S. securities reduce their costs and contribute to a greater transparency of processes,” said Denis Buryakov, Managing Director for Depository Operations, NSD.
“The foreign securities segment of the Moscow Exchange is growing at a high rate: the number of instruments traded will exceed 200 on 2 August and reach 500 by the end of the year; and the number of investors and trading participants providing investment opportunities to their clients through the well-developed and secure infrastructure of the Moscow Exchange is also growing. We are making great efforts to simplify the investor journey, remove extra costs for the investor, and provide services, while easing tax processes for retail investors. The new move in that direction is significant simplification of the W-8BEN filing process,” commented Boris Blokhin, Head of the Equity Market Department, Moscow Exchange.
During the marketing period, no fee will be charged for the service, whether a Form W-BEN is filed in paper format (original or copy) or in electronic format.