Do I pay tax on dividends in the US?
Yes, but it’s already sorted for you.
But the good news is your US withholding tax is deducted before your dividends reach your Hatch account, so you don’t need to lift a finger to sort it.
The US withholding tax rate on dividends is usually 15% after you’ve completed a W-8BEN form (which you do as part of signing up to Hatch).
Our US broking partner automatically submits all your required annual US tax reports on your behalf. You will just notice a $0.50 US fee for tax reporting deducted from your account at tax time.
Do I pay tax on dividends in New Zealand?
The rules differ depending on whether the cost value (the price you paid) of your overseas investments is more or less than $50,000 NZD at any point in the tax year (1 April 2020 - 31 March 2021).
I earned less than $200 NZD dividends
You probably won’t need to pay tax on your dividends or file an individual tax return for your Hatch investments.
I earned more than $200 NZD in untaxed income
You probably will need to pay tax on your dividends and file an individual tax return for your Hatch investments (but it’s very straightforward).
I had more than $50,000 NZD invested overseas - FIF and trusts
You probably won’t need to pay tax on your dividends but you will need to pay tax on your Foreign Investment Funds (FIF) income.
What if I’m a tax resident in other countries too?
If you’re a tax resident outside New Zealand you’ll need to consider the tax rules for each country, including double tax agreements. A Google search or tax specialist (like an accountant) should point you in the right direction.
Need more help?
We don’t know your individual tax situation but we are happy to point you in the right direction. If you have any questions:
Help from Hatch partners
If you use Hnry, you can also get FIF reporting as part of their tax services
Note: Your tax obligations will depend on your situation, so we recommend that you seek professional tax advice. These obligations may change over time, it’s your responsibility to keep up to date with changes.