Your 2020 tax statements are now available through Hatch.
In the US
Yes. 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.
Note: If you’re a tax resident outside New Zealand you’ll need to consider the tax rules for every other country, including double tax agreements. As always, we recommend seeking professional tax advice.
In New Zealand
The tax rules differ depending on whether the cost price of your overseas investments (excluding any investments held in a PIE) total more or less than $50,000 NZD for the whole tax year. Overseas investments include:
- Shares in foreign companies (including those outside of Hatch)
- Units in a foreign unit trust
- Foreign life insurance policy
Individuals with $50,000 NZD or less invested overseas
Yes, dividends you receive from Hatch are considered taxable income. The IRD says that "you need to complete an individual tax return at the end of the tax year if you received more than $200 NZD (before tax) in income that we have not been told about".
You’ll receive up to a maximum of a 15% tax credit for the withholding tax you’ll have already paid in the US. We’ll give you the information you need to complete your NZ Income tax return for your Hatch investments.
In NZ - Trusts and individuals with $50,000 NZD or more invested overseas
Yes. Your overseas investments will generally be taxed under the Foreign Investment Fund (FIF) rules and you will not be separately taxed on the dividends you receive. We have partnered with Sharesight and Hnry to make tax time easy (both make calculating your FIF obligations easy), and we also recommend you chat to your professional tax advisor before investing.
Help from Hatch partners:
- Connect Hatch to Sharesight to get automated FIF reporting
- 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.