Tax at source withheld on return from US securities

The tax at source legislation in the United States was amended on 1 January 2001. The law provides that an owner of securities issued by a US company must report his or her country of taxation to the custodian.

Obligation to report

The obligation to report concerns the following persons:

  • citizens of the United States
  • persons with dual citizenship (of which one is US)
  • holders of the US Green Card
  • persons residing in the United States
  • persons or companies whose country of taxation is other than Finland.

Regardless of citizenship (except US), the obligation to report is not applicable if:

  • the investor's country of residence is Finland and none of the above-mentioned points concern him or her.

Companies are obligated to sign a tax agreement confirmation.

Consequences to the customer for neglecting the obligation to report:

If the customer fails to report the above-mentioned information, the bank shall withhold tax at source according to the maximum US tax percentage (30-31%) on all return, and in some cases on the selling price. According to the Finnish-American tax agreement, the normal tax at source for interest income is 0% and for dividend income 15%. If the customer is liable to taxation in the United States, return received in Finland will not be subject to tax at source.

Further information from Nordea Customer Service at tel. 0200 70 000 (Inc/mcc) Mon-Fri 10.00 - 16.30.