As long as you’re not a US tax resident, you don’t need to worry about US tax on dividends you receive from your Hatch investments. Our US broking partner DriveWealth uses the information you enter when you join Hatch to automatically complete and process a W-8BEN for you. A W-8BEN is a form required by the IRS so you pay the right amount of tax in the US. We charge you a one-off $1.50 USD fee for this service, which is deducted from your first deposit.
Any US tax you’re required to pay on dividends is deducted before the USD lands in your Hatch account and at tax time, all your required annual US tax reports are submitted on your behalf. Every year, 50c USD will be deducted from your available balance in Hatch to cover the costs of filing your US returns.
DriveWealth will need to confirm your information (such as address and phone number) every three years. It's important to update or confirm your information at the three year mark as the withholding tax rate goes up to 30% (instead of 15%) on any dividends you receive until the time you update your details.
We will send you an email and instructions on how to do this when it's time to update your information with our broker, DriveWealth.
If you're a US tax resident, get in touch and we’ll do our best to point you in the right direction.
If I have already paid tax in the US, do I need to pay it in NZ?
Maybe. Find out what you might need to do at NZ tax time here - for many investors it’s likely to be nothing! You can also find out the total dividends you’ve received and estimated investment costs for the current tax year at any time in the tax reports section in Hatch.
NZ has a tax agreement with the USA, so if you do need to pay tax in NZ, you should be able to claim a credit for the full amount that you’ve already paid in the US - no double taxing!
Note: Your tax obligations are unique to you - if you're unsure, we recommend you seek professional tax advice. Your situation may change over time; it’s your responsibility to keep up to date with changes.