Important Disclosure: This information is provided solely as reference material, does not replace or supersede professional advice, and is subject to change. Nothing herein constitutes or should be construed as legal, tax, financial, or any other form of professional advice. Rules and regulations affecting your investments may vary depending on your individual circumstances, and you remain responsible for complying with all applicable laws and obligations. No representation or warranty is made concerning the accuracy, completeness, or timeliness of the information provided. You should seek independent advice from qualified professionals before making any decisions related to the information herein.
🔹 What is US Tax Withholding for Non-US Persons?
US tax withholding is the process by which the US government collects tax on income earned by foreign (non-US) investors from US-based investments, including both public and private markets. This includes dividends, interest, and some other income types.
🔹 Which Investments Trigger US Withholding Tax?
Public Market Investments:
- US-listed stocks paying dividends
- US-based ETFs or mutual funds distributing income
- Certain US bonds or debt instruments with interest income
Private Market Investments:
- US-source income from private equity, credit, real estate, or venture funds
- Real estate funds with exposure to US properties
- Private funds with underlying US securities or operations
🔹 How Much Tax is Withheld?
Default Rate:
- 30% on most US-sourced income
- Applies unless your country of tax residence has a tax treaty with the US
Singapore Investors:
- Singapore does not have a tax treaty with the US
- 30% rate typically applies
- Actual impact varies by product
- For private market funds, the actual impact of US withholding tax varies by fund, depending on its structure and how different income components are classified for tax purposes—some portions may qualify for exemptions.
Other International Investors:
- Check if your country of tax residence has a US tax treaty
- You may be eligible for reduced withholding rates
🔹 Are There Any Exceptions or Reductions?
Yes, some important exceptions:
- Qualified Interest Income (QII): Some regulated investment companies classify certain interest as QII, which may be exempt. Withheld amounts that are classified as QII will be refunded.
- Portfolio Interest Exemption: Interest not connected to US trade/business may be exempt.
- Capital Gains: Generally not subject to US withholding for non-residents unless tied to a US trade or business.
- Tax Treaties: May reduce or eliminate withholding on certain income types — check your country’s treaty status.
🔹 What About Tax in My Home Country?
Singapore Investors:
- Capital Gains: Not taxed in Singapore. While capital gains are not taxed, investors also cannot claim tax deductions for any capital losses incurred in the investment.
- Dividends: Typically not taxable due to the one-tier corporate tax system
- Foreign Income Reporting: No requirement to report foreign investment income (if not received through a trade/business in Singapore, including income deposited into a Singapore bank account)
- US Estate Tax: Not applicable if investing through Arta’s non-US domiciled fund structures
Other International Investors:
- Repatriated funds or offshore income may have tax consequences
- Local laws differ — consult a tax professional in your country
🔹 What Do I Need to Do as an Arta Member?
- Keep your citizenship, legal address and country of tax citizenship and country of residence info up to date.
This ensures the correct withholding rate is applied. - Review fund documentation carefully.
Tax impact varies by product and fund structure. - Consult your own tax advisor.
Especially important if you’re subject to estate taxes, own a trust, or are investing through an entity.
🔹 Where Can I Learn More?
- Questions? Email us at membership@artafinance.com