Have a Tax Question? Ask a Tax Expert
Hi and welcome to Just Answer!First of all - according to the tax treaty between the US and the Netherlands - dividends paid by US corporations are subject of reduced withholding - 15% instead of 30% as for other nonresident aliens. However qualified dividends - are subject of 5% withholding.See for reference IRS publication 515 - page 41 - http://www.irs.gov/pub/irs-pdf/p515.pdf and the tax treaty - www.irs.gov/pub/irs-trty/nether.pdf To claim a reduced withholding - you need to provide a signed forms W8BEN to the payer - and claim tax treaty benefits - www.irs.gov/pub/irs-pdf/fw8ben.pdf Generally - according to your information - your income is not effectively connected to the trade or business activities in the US - and is taxed at flat rate - and most likely you are not entitled for a refund. However - you may claim a credit for US taxed on your tax return in the Netherlands - thus effectively will avoid double taxation.In case your withholding is more that your tax liability - you may file a tax return as a nonresident and determine your actual tax liability. In this case you will be refunded the difference.Here is the form to use - 1040NR - www.irs.gov/pub/irs-pdf/f1040nr.pdf here are instructions - www.irs.gov/pub/irs-pdf/i1040nr.pdf Mailing address may be found in instructions - page 5 -
Department of the Treasury
Internal Revenue Service
Please be sure to ask for clarification as needed.My goal is to provide EXCELLENT service - and I will address all your concerns.
Do I have - in my case - to send the W8BEN form to Legacy Reserves. In the instruction of this form it is stated: do not nsend this form to the IRS. Because ofn the tax treaty between the USA and The Netherlands I can claim a credit of 15% of the dividend paid on my tax return in The Netherlands, but a claim of more than 15% is not rewarded; with other words: I have to reclaim the difference (of the tax withhold) myself.
Yes - form W8BEN should be provided to the payer - not to the IRS. Because you are a nonresident alien from The Netherlands - you should use this form to claim reduced withholding based on the tax treaty. The tax treaty overrides general tax laws.
If you held shares more than a year – dividends are qualified and are taxed at 5% rate.
Your last sentence: Even in a Ltd partnership ? See: Press Release Legacy Reserves LP 25 October 2012
You are also correct - that on your Netherlands tax return you may claim a credit of your US tax liability. If withholding is more than your actual tax liability - the difference may be claimed from the IRS only by filing the tax return - form 1040NR - I referenced above.
Partnerships generally do not pay dividends out of their business income - but in case the partnership receives dividends from shares owned - they are passed to partners as dividends.So you need to be clear what type of income do you receive.
At present I can't open the sites provided by you. I will try next week.
Thank you and have a nice weekend.
Sure - take your time - these are IRS forms.
You may come back later if needed and please post all your questions.I might be not immediately available - but surely will reply.