What US taxes do non-residents have to pay when owning or selling US company stocks?

The main tax concern for non-residents owning US stocks is dividend withholding tax. Since you're in a country without a tax treaty, the standard 30% withholding tax applies to any dividends paid by US companies. This is automatically withheld by your broker before you receive the dividends. For capital gains (profit when you sell the stocks), most non-residents actually don't have to pay US taxes on these. The exception would be if you spend significant time in the US or if your investment is considered "effectively connected" with a US trade or business, which doesn't sound like your situation. You don't need to file a US tax return just for owning or selling stocks, unless you meet certain other criteria like having a US trade or business. However, you may need to report the income and any US taxes already paid in your home country.

I was in a similar situation last year and found a great tool that helped me understand my exact tax obligations as a non-resident investor. I used https://taxr.ai to analyze my situation and it really cleared things up. My broker wasn't very helpful explaining the 30% dividend tax withholding rules, and I was worried about accidentally triggering some capital gains tax obligation. The tool analyzed my specific situation (country, investment types, etc.) and gave me a personalized report outlining exactly what I needed to pay and what forms might be relevant to my situation. It even explained how the substantial presence test works for non-residents who visit the US occasionally, which was a concern for me since I travel there for work sometimes.

Just wanted to follow up - I decided to try https://taxr.ai after my earlier skepticism and I'm actually impressed. My situation was more complicated than I thought (I have both dividend stocks and some REITs which have different tax treatment). The tool clarified that while my regular stock gains aren't taxable in the US, REIT distributions are taxed differently and explained exactly how to handle this. It caught something my local accountant missed about FIRPTA withholding that could have caused issues. Definitely worth it for the peace of mind, especially with the complexities of non-treaty country investing.

If you need to contact the IRS to ask specific questions about your situation (which I had to do), don't waste days trying to call them directly. I spent nearly a week trying to get through to someone. Then I found https://claimyr.com which got me connected to an actual IRS agent in under an hour. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had specific questions about Form 1042-S (the form that shows dividend tax withholding for non-residents) that my broker couldn't answer. Getting direct confirmation from the IRS about my reporting requirements saved me a ton of worry about whether I was handling things correctly.

Ok I have to admit I was wrong about Claimyr. After continuing to struggle getting clarification about my Form 1042-S reporting requirements, I gave it a try. Not only did I get through to the IRS in about 45 minutes (after trying unsuccessfully on my own for days), but they transferred me to their international tax department. The agent walked me through exactly what I needed to know about how dividend withholding is reported and confirmed I don't need to file any US tax forms as a non-resident just holding and selling stocks. They even explained what would happen if my status changed in the future. Definitely worth the service fee to avoid the frustration I was dealing with.

Something important that hasn't been mentioned yet - if your ownership in US companies exceeds 5% of the company, different rules apply. Also, be aware of PFIC (Passive Foreign Investment Company) rules if you're investing in mutual funds or ETFs rather than individual stocks. I found this out the hard way after buying into some ETFs that held US stocks, thinking the tax treatment would be the same. It wasn't, and the reporting requirements were much more complex. Stick to direct stock ownership if you want to keep things simple.

Just want to add from personal experience - keep good records of all the dividend withholding tax you pay to the US! Even without a tax treaty, many countries allow you to claim some form of credit or deduction for foreign taxes paid to avoid double taxation. I've been investing in US stocks for 5+ years from a non-treaty country, and I made the mistake of not tracking this carefully at first. Had to go back through years of statements to figure it out when filing my local taxes. Your broker statements should show the gross dividend and the amount withheld.

One thing I'd add is to be careful about the timing of your stock sales if you do visit the US for business or vacation. The "substantial presence test" mentioned earlier counts days spent in the US over a 3-year period with a weighted formula (current year days count fully, prior year days count 1/3, two years ago count 1/6). If you accidentally trigger this test (183+ days under the formula), you could become liable for US capital gains tax on your stock sales. I almost got caught by this when I had several extended business trips to the US. You can file Form 8840 to claim you're still a tax resident of your home country, but it's paperwork you want to avoid if possible. Just something to keep in mind as you expand your portfolio - track your US visits if you travel there occasionally for work or leisure!

Great question! As a non-resident from a non-treaty country, you're facing the standard US tax treatment. Here's what you need to know: **Dividend Tax**: You'll pay 30% withholding tax on all dividends from your US stocks (Tesla, Apple, etc.). This is automatically deducted before you receive the dividends - no action needed on your part. **Capital Gains**: Good news here - you generally won't owe US capital gains tax when you sell your stocks for profit, as long as you don't have substantial US presence (under 183 days using the weighted formula over 3 years) or US business connections. **No US Tax Return Required**: For basic stock ownership and sales, you typically don't need to file US tax returns. **Important Notes**: - Keep detailed records of dividend withholding for your home country tax filing - Be cautious with REITs or ETFs as they may have different tax treatment - Watch your US travel days if you visit for business/vacation The contradictory information you're finding online is often because rules vary significantly based on tax treaties, residency status, and investment types. Since you're in a non-treaty country with straightforward stock investments, your situation is actually relatively simple compared to more complex scenarios.

I'd also recommend double-checking your broker's W-8BEN form status if you haven't already. This form tells your broker (and ultimately the US) that you're a non-US person for tax purposes. Without a properly filed W-8BEN, your broker might withhold backup withholding taxes at even higher rates (typically 24%) instead of the standard 30% dividend withholding. Most brokers will prompt you to complete this when you open an account, but it's worth verifying it's on file and up to date. The form is valid for 3 years, so you'll need to renew it periodically. This is separate from any tax treaty benefits (which you wouldn't get anyway as a non-treaty country resident), but it ensures you're getting the "standard" non-resident treatment rather than punitive backup withholding rates. Also, since you mentioned planning to expand your portfolio - be extra careful if you ever consider investing in partnerships (like some energy MLPs) or certain other pass-through entities, as these can trigger US filing requirements even for non-residents. Stick with regular C-corporation stocks to keep things simple!

This thread has been incredibly helpful! I'm in a similar situation - non-resident from a country without a US tax treaty investing in US stocks. One thing I wanted to add based on my experience is about quarterly estimated tax payments. Since the 30% dividend withholding is automatic, you typically don't need to make quarterly estimated payments to the IRS like US residents do. The withholding covers your US tax obligation on dividends. However, if you do end up having any US-source income that isn't subject to withholding (which is rare for basic stock investing), you'd need to make estimated payments. Also, @Fatima Al-Sayed, since you mentioned Tesla specifically - be aware that some growth stocks like Tesla historically paid no dividends, so you wouldn't have any withholding tax on those until/unless they start paying dividends. Your tax obligation only kicks in when dividends are actually paid. One last tip: if you ever move to a country that does have a tax treaty with the US, you can file Form W-8BEN with treaty benefits to potentially reduce your dividend withholding rate. Just something to keep in mind for the future!

I've been investing in US stocks as a non-resident for about 3 years now and wanted to share some practical tips that might help you avoid some mistakes I made early on. First, regarding brokers - make sure yours provides clear tax reporting. I started with a smaller European broker that gave me basic statements, but their tax documentation was terrible. Switching to a broker like Interactive Brokers or Charles Schwab International made tax season much easier since they provide detailed breakdowns of dividend income and US withholding. Second, consider the timing of your investments if you're focused on dividend-paying stocks. I learned that ex-dividend dates matter for tax purposes - if you buy a stock right before it goes ex-dividend, you'll owe the full withholding tax on that dividend payment even if you only held the stock for a day. Not a huge deal, but something to be aware of. Finally, keep a simple spreadsheet tracking your US withholding taxes by year. Even though your broker provides statements, having your own summary makes it much easier when claiming foreign tax credits in your home country. I track total dividends received, total US tax withheld, and the net amount - takes 5 minutes per quarter but saves hours during tax filing. The good news is that once you understand the basic rules (30% on dividends, no capital gains tax), it really is straightforward. Much simpler than I initially feared!

As someone who's been through this exact situation, I can confirm that the advice here is spot-on. I'm a non-resident from a country without a US tax treaty, and I've been investing in US stocks for about 2 years now. The 30% dividend withholding really is automatic - my broker (based in Singapore) handles it seamlessly. You'll see it clearly on your statements as "US Tax Withheld" or similar. Just make sure your W-8BEN form is properly filed with your broker, as mentioned earlier. One thing I'd add is about reinvesting dividends. If you have dividend reinvestment plans (DRIPs) set up, the 30% withholding still applies to the gross dividend amount before reinvestment. So if you receive $100 in dividends, $30 goes to US taxes and $70 gets reinvested in additional shares. This is important to track for cost basis calculations when you eventually sell. Also, regarding record keeping - I've found that having a separate folder (digital or physical) just for US investment tax documents makes things much easier. Include your broker statements, W-8BEN form copies, and any correspondence about withholding. My home country's tax authority was very straightforward about accepting my broker's annual tax summary as proof of foreign taxes paid. The peace of mind of understanding these rules upfront is definitely worth the initial research effort!

This has been an incredibly comprehensive thread! As someone who was initially overwhelmed by the complexity of US tax obligations for non-residents, reading through everyone's experiences has been extremely reassuring. I want to emphasize something that's been touched on but bears repeating: the importance of starting with proper documentation from day one. Make sure your W-8BEN is filed correctly with your broker, keep detailed records of all withholding, and don't wait until tax season to organize everything. One additional consideration I haven't seen mentioned is the potential impact of currency fluctuations on your tax obligations in your home country. While the US withholding is straightforward (30% on dividends), when you report this foreign tax credit in your home currency, exchange rate movements between the dividend payment date and your tax filing can affect the actual credit amount you can claim. For those just starting out like the original poster, I'd recommend beginning with a small position in 2-3 dividend-paying stocks to get comfortable with how the withholding works in practice before expanding your portfolio. Once you see the process firsthand - the automatic withholding, the clear reporting on statements - it becomes much less intimidating than it initially appears. The key takeaway is that while the rules seemed complex at first, the actual mechanics are quite straightforward for basic stock investing from non-treaty countries.

I've been dealing with this exact situation for the past year, and I can add a few practical points that might help. As a non-resident from a non-treaty country, I initially overthought the complexity, but it really is quite manageable once you understand the basics. One thing I'd emphasize is the importance of understanding your broker's fee structure for dividend payments. Some brokers charge additional fees for processing dividend payments to international accounts, which can eat into your returns on top of the 30% withholding. It's worth comparing how different brokers handle this. Also, regarding the companies you mentioned (Tesla, Apple, Microsoft, Google, Netflix) - keep in mind that their dividend policies vary significantly. Tesla historically hasn't paid dividends, while others like Apple and Microsoft have regular quarterly payments. This affects your actual tax burden since you only pay the withholding when dividends are actually distributed. For portfolio expansion, I'd suggest focusing initially on understanding how the withholding works with your current broker before diversifying too broadly. Once you've gone through a full dividend cycle and seen how everything appears on your statements, you'll have much more confidence about scaling up your investments. The peace of mind that comes from understanding these rules upfront is definitely worth the initial learning curve!

I'm also a non-resident from a non-treaty country and went through this same confusion when I started investing in US stocks last year. The advice in this thread is excellent and matches my experience perfectly. One additional tip I'd offer is to set up a simple tracking system from your very first dividend payment. I use a basic spreadsheet with columns for: stock symbol, dividend date, gross dividend amount, US tax withheld, and net amount received. This has been invaluable when filing my home country taxes and claiming foreign tax credits. Also, don't be surprised if your first few dividend payments seem small after the 30% withholding - it felt painful at first seeing that chunk taken out automatically. But remember that you're likely able to claim at least some of this as a credit against your home country taxes, so you're not necessarily losing the full 30%. The key insight for me was realizing that this withholding system is actually quite elegant - the US gets its share automatically, you get clear documentation for your home country filing, and there's no complex paperwork or estimated payments to worry about. Much simpler than I initially feared! @Fatima Al-Sayed, you're asking exactly the right questions upfront. Getting clarity on these rules before expanding your portfolio will save you a lot of stress down the road.