Dividend taxes

Dividends are usually subject to regional withholding tax which is automatically deducted before you receive the payment to your account.

Lightyear does not give tax advice as it always depends on your personal circumstances and local tax laws. If you are unsure, we recommend talking to your local tax authorities.

Not all instruments traded on US markets are the same. On Lightyear, you'll find regular US-listed stocks, ADRs (foreign companies listed on US exchanges), and US-listed stocks of companies headquartered outside the US. We don't currently offer ETFs traded on US exchanges.

Dividend withholding tax is automatically deducted from all dividends paid by US-listed companies with a US payment source, in line with US tax regulations. The dividend after tax is credited to your USD cash balance.

For personal accounts, we automatically generate and submit an IRS W-8BEN form on your behalf during onboarding to reduce the withholding tax rate where applicable. If any of your details are incorrect or have changed, please contact our support team below this article to make sure your tax reporting stays accurate.

The rate applied depends on your country of tax residency:

• 10%: Bulgaria
• 15%: Austria, Belgium, Cyprus, Denmark, Estonia, Finland, France, Germany, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Slovakia, Slovenia, Spain, Sweden, United Kingdom
• 30%: Croatia, Greece, Hungary

Some stocks trade on US exchanges but are headquartered outside the US, meaning their dividends originate from a non-US payment source. For these instruments, the W-8BEN does not apply and US withholding tax is not deducted by us or our brokerage partner. Instead, tax may be withheld at source based on the company's country of origin. The net amount we receive for your position is what gets credited to your account.

Because the tax is withheld before the dividend reaches us, you'll see a 0.00% withholding rate in your transaction confirmation. If you're unsure about the tax treatment of a specific stock, we recommend checking with the local tax authorities.

American Depositary Receipts are certificates representing ownership of foreign company shares and are traded on American stock exchanges. For ADRs, tax is withheld at source based on the local withholding rates of the underlying instrument's home country, not US rates.

Because the tax is withheld before the dividend reaches us, you'll see a 0.00% withholding rate in your transaction confirmation. If you're unsure about the rate applied to a specific ADR, please consult with the local tax authorities.

The table below shows dividend withholding tax rates for the most common UK and EU markets. These rates are for guidance only and may change.

Non-treaty rates apply for all Lightyear users. Tax treaties that may reduce your rate aren't applied, therefore, if you believe one applies to your situation, you'll need to claim it directly with the relevant tax authority.

Please note that these rates here are informational and they are subject to change depending on local tax laws.

You can find dividend payments in two statements under the Transactions tab — the Account statement, which covers all transactions, or the Income statement for an income-focused view. There are currently no separate tax or dividend-specific statements. Read more about them here: Taxes and statements.

See also: Do you pay dividends?