Every dividend a US company pays to a shareholder abroad passes through a withholding step before it reaches the account. How much is taken depends almost entirely on one fact: the country where the shareholder lives for tax purposes, and whether that country has an income tax treaty with the United States. This page sets out the rate for each treaty partner, explains what the columns mean and lists the countries that get no reduction. It then covers interest, fund payouts and REIT dividends, which follow rules of their own, and ends with worked numbers and the refund route for tax taken at the wrong rate. The guide to investing in the US from abroad covers the wider picture, from accounts to currency.
How much US tax is withheld from dividends?
The default is 30% on US-source dividends, unless a tax treaty sets a lower rate, deducted by the payer before the money reaches you.
Dividends from US corporations are US-source income wherever the shares trade and whoever holds them in custody. The withholding agent, normally your broker or the custodian behind it, takes the tax at payment and passes it to the IRS. A nonresident's US tax on a dividend is a flat percentage of the gross amount, with no deductions, so when the payer withholds at the right rate the US side of that dividend is settled.
A lower rate needs two things: residence in a country whose treaty with the US reduces dividend tax, and a valid Form W-8BEN on file with the payer that names that country. Form W-8BEN explained covers the lines that make the claim. Living in a treaty country achieves nothing without the form, and the form cannot help someone whose country has no treaty.
US dividend withholding rates by country
The table lists dividend and interest rates for residents of each US treaty partner, taken from Table 1 of the IRS tax treaty tables.
| Country | Tax treaty | Dividends (most investors) | Dividends (10%+ corporate owners) | Interest |
|---|---|---|---|---|
| Australia | Yes | 15% | 5% | 10% |
| Austria | Yes | 15% | 5% | 0% |
| Bangladesh | Yes | 15% | 10% | 10% |
| Barbados | Yes | 15% | 5% | 5% |
| Belgium | Yes | 15% | 5% | 0% |
| Bulgaria | Yes | 10% | 5% | 5% |
| Chile | Yes | 15% | 15% | 10% |
| Canada | Yes | 15% | 5% | 0% |
| China | Yes | 10% | 10% | 10% |
| Cyprus | Yes | 15% | 5% | 10% |
| Czech Republic | Yes | 15% | 5% | 0% |
| Denmark | Yes | 15% | 5% | 0% |
| Egypt | Yes | 15% | 5% | 15% |
| Estonia | Yes | 15% | 5% | 10% |
| Finland | Yes | 15% | 5% | 0% |
| France | Yes | 15% | 5% | 0% |
| Germany | Yes | 15% | 5% | 0% |
| Greece | Yes | 30% | 30% | 0% |
| Iceland | Yes | 15% | 5% | 0% |
| India | Yes | 25% | 15% | 15% |
| Indonesia | Yes | 15% | 10% | 10% |
| Ireland | Yes | 15% | 5% | 0% |
| Israel | Yes | 25% | 12.5% | 17.5% |
| Italy | Yes | 15% | 5% | 10% |
| Jamaica | Yes | 15% | 10% | 12.5% |
| Japan | Yes | 10% | 5% | 10% |
| Kazakhstan | Yes | 15% | 5% | 10% |
| South Korea | Yes | 15% | 10% | 12% |
| Latvia | Yes | 15% | 5% | 10% |
| Lithuania | Yes | 15% | 5% | 10% |
| Luxembourg | Yes | 15% | 5% | 0% |
| Malta | Yes | 15% | 5% | 10% |
| Mexico | Yes | 10% | 5% | 15% |
| Morocco | Yes | 15% | 10% | 15% |
| Netherlands | Yes | 15% | 5% | 0% |
| New Zealand | Yes | 15% | 5% | 10% |
| Norway | Yes | 15% | 15% | 0% |
| Pakistan | Yes | 30% | 15% | 30% |
| Philippines | Yes | 25% | 20% | 15% |
| Poland | Yes | 15% | 5% | 0% |
| Portugal | Yes | 15% | 5% | 10% |
| Romania | Yes | 10% | 10% | 10% |
| Slovak Republic | Yes | 15% | 5% | 0% |
| Slovenia | Yes | 15% | 5% | 5% |
| South Africa | Yes | 15% | 5% | 0% |
| Spain | Yes | 15% | 5% | 0% |
| Sri Lanka | Yes | 15% | 15% | 10% |
| Sweden | Yes | 15% | 5% | 0% |
| Switzerland | Yes | 15% | 5% | 0% |
| Thailand | Yes | 15% | 10% | 15% |
| Trinidad and Tobago | Yes | 30% | 30% | 30% |
| Tunisia | Yes | 20% | 14% | 15% |
| Turkey | Yes | 20% | 15% | 15% |
| Ukraine | Yes | 15% | 5% | 0% |
| United Kingdom | Yes | 15% | 5% | 0% |
| Venezuela | Yes | 15% | 5% | 10% |
Countries missing from the table either have no income tax treaty with the US or no longer get treaty rates on dividends. They are covered in the section on the full 30% below.
How do you read the treaty rate table?
Most individual investors need only the column headed Dividends (most investors), which is the rate on ordinary portfolio holdings.
The column for 10%+ corporate owners shows the direct-investment rate, which treaties reserve for a company holding a set share of the paying company's voting stock, usually 10% and often held directly. It exists for parent companies and holding structures, not for a person with a few hundred shares. Under most treaties, dividends from US mutual funds and ETFs are held to the portfolio rate anyway: footnotes to Table 1 apply it to dividends from a regulated investment company, whatever the size of the holding.
The Interest column is the treaty ceiling on US-source interest. For most savers abroad it is academic, because US law exempts the interest they are likely to earn before the treaty is even consulted, as the interest section below explains.
The table reproduces the IRS's May 2023 revision of Table 1, and three later changes matter:
- Chile. The US-Chile treaty entered into force on December 19, 2023 and applies to tax withheld on payments from February 1, 2024. Its text sets 15% on portfolio dividends and 5% for a company holding at least 10% of the voting shares. For five years it allows 15% on most interest, after which the cap falls to 10%. Where the Chile row differs, follow the treaty.
- Russia. The US partly suspended its treaty with Russia, including the dividend and interest articles, from August 16, 2024, so residents of Russia now face the statutory rate.
- Hungary. The US terminated its treaty with Hungary, and it stopped applying to withholding on January 1, 2024.
Which countries' residents pay the full 30%?
Residents of countries without a US income tax treaty pay the full 30% on US dividends, as do residents of a few treaty countries whose treaties leave dividends untouched.
| Country | Tax treaty | Dividends (most investors) | Dividends (10%+ corporate owners) | Interest |
|---|---|---|---|---|
| United Arab Emirates | No | 30% | 30% | 30% |
| Saudi Arabia | No | 30% | 30% | 30% |
| Qatar | No | 30% | 30% | 30% |
| Kuwait | No | 30% | 30% | 30% |
| Singapore | No | 30% | 30% | 30% |
| Hong Kong | No | 30% | 30% | 30% |
| Malaysia | No | 30% | 30% | 30% |
| Vietnam | No | 30% | 30% | 30% |
| Nigeria | No | 30% | 30% | 30% |
| Kenya | No | 30% | 30% | 30% |
| Ghana | No | 30% | 30% | 30% |
| Brazil | No | 30% | 30% | 30% |
| Argentina | No | 30% | 30% | 30% |
| Colombia | No | 30% | 30% | 30% |
That list is a sample, and any country without a treaty is in the same position. Several financial centers that investors often assume have a treaty do not, including Singapore and Hong Kong, and no Gulf state appears in the IRS treaty table.
Inside the treaty network, several treaties also leave ordinary dividends at 30%. Greece's treaty does not reduce dividend withholding, and neither does the treaty with Trinidad and Tobago. Pakistan's treaty lowers the rate only for companies with a qualifying stake, so individuals stay at 30%. The old treaty with the Soviet Union, which the IRS still applies to nine successor states such as Armenia, Georgia and Uzbekistan, exempts interest but leaves dividends at 30%. Russia and Hungary, covered above, complete the list.
For investors in this position the levers are structural rather than paperwork. A W-8BEN still matters, because it establishes foreign status and protects interest and sale proceeds, but it cannot lower dividend tax. Some investors compare US-listed funds with Irish-domiciled ones, which receive US dividends at the US-Ireland treaty rate inside the fund; the comparison of US and Irish-domiciled ETFs runs the numbers. The Brazil guide works through a no-treaty case in detail.
Why is interest usually exempt when dividends are not?
Because US law itself exempts most interest that nonresidents earn on bank deposits, Treasuries and registered bonds, while it offers no such exemption for dividends.
The portfolio interest exemption covers interest on bonds in registered form issued after July 18, 1984, provided the payer holds documentation that the owner is not a US person. Three other rules cover most of what a typical investor holds:
- Bank deposits. Interest on deposits with US banks, savings institutions and credit unions is exempt when it is not connected with a US business.
- Short-term debt. Interest and discount on obligations payable 183 days or less from issue are exempt even without a form, which covers Treasury bills of up to 26 weeks. A 52-week bill runs longer than 183 days, so it relies on the portfolio interest exemption and therefore on a W-8BEN.
- Fund interest. US mutual funds and ETFs can pass on interest they earn as interest-related dividends, which are exempt from withholding when the fund designates them.
There are exceptions. Interest paid to someone owning 10% or more of the voting power of the issuing company is not portfolio interest, and neither is contingent interest tied to the borrower's profits or sales; both fall back to 30% or the treaty rate. For an investor abroad holding Treasury bills, US bank deposits or bond funds, though, the treaty interest rate rarely comes into play. Can foreigners buy US Treasury bills? covers that side in depth.
How are ETF and REIT payouts withheld?
Ordinary dividends from US-listed ETFs, mutual funds and REITs are withheld at the same 30% or treaty rate as company dividends, but parts of some payouts are exempt.
A US-listed ETF is a regulated investment company, a fund that passes its income through to shareholders, and what is an ETF explains the structure. How the fund classifies each payment decides the US tax on it.
| Fund payout | US withholding for a nonresident |
|---|---|
| Ordinary dividends from the shares the fund holds | 30% or the treaty's portfolio rate |
| Interest-related dividends | Exempt when designated by the fund |
| Short-term capital gain dividends | Exempt when designated, unless you were in the US 183 days or more |
| Capital gain distributions | Payer may choose not to withhold; not taxable for most nonresidents |
| REIT ordinary dividends | 30% or the treaty's portfolio rate, if you meet the treaty's REIT conditions |
| REIT distributions from property sales | Treated as ordinary dividends for holders of 10% or less of a listed REIT |
Treaties add REIT conditions of their own. Under most modern treaties, Table 1's footnotes give the portfolio rate on REIT dividends to an individual holding no more than 10% of the REIT, which covers almost any private investor, while the treaties with Kazakhstan and Ukraine leave REIT dividends at 30%. Because the fund exemptions depend on how each payout is designated and on the broker applying them, the year's Form 1042-S is where to check what was actually withheld on each type.
Dividends from non-US companies are a separate case. A foreign company's dividend is generally outside US withholding even when its shares or depositary receipts trade in New York, though the company's own country may tax it.
What does a US dividend look like after withholding?
After withholding, a resident of Japan keeps 90% of a US dividend, a resident of Germany 85% and a resident of Hong Kong 70%.
Worked example: The same $750 dividend in three countries
Three investors each hold $50,000 of the same US-listed fund, which pays $750 of ordinary dividends over a year, a 1.5% yield. Each has a valid W-8BEN on file.
- Japan, treaty rate 10%: $75 withheld, $675 received.
- Germany, treaty rate 15%: $112.50 withheld, $637.50 received.
- Hong Kong, no treaty, 30%: $225 withheld, $525 received.
At the same payout for ten years, the Hong Kong investor loses $1,500 more to US withholding than the investor in Japan, before any growth or home-country tax.
The Hong Kong result is the same with or without a W-8BEN, since there is no treaty rate to claim; for the other two, a missing form would rule out the treaty rate. The dividends arrive in US dollars, so their value in yen, euros or Hong Kong dollars also depends on the exchange rate on the day you convert, which the currency converter shows. How your own country taxes what is left, and what credit it gives for the US tax, is covered in reporting US investments at home.
How do you get back US tax withheld at too high a rate?
Ask the payer to correct it before it files Form 1042-S for the year; after that, the only route is a US tax return on Form 1040-NR.
Payers may repay over-withheld tax, or reduce later withholding to make up for it, until they file or furnish the Form 1042-S, and no later than its extended due date. The form must reach you by March 15 of the following year, so a broker contacted early, with a valid W-8BEN in place, may be able to fix the error itself.
Once that window closes, the money comes back only through the IRS. The Form 1040-NR instructions describe a simplified procedure for this case. It is open to a nonresident who had no US trade or business and no effectively connected income, whose US tax was fully covered by withholding at source, and who is filing only to reclaim tax withheld at source. The return reports all income of the type where the error happened, at the correct treaty rate, and claims the withholding shown in box 10 of each Form 1042-S, with the forms attached to its front. A return for a year with no US wages is due by June 15 of the following year, and it needs a US taxpayer number, so investors without one apply for an ITIN on Form W-7.
| Box on Form 1042-S | What it shows | Use in a refund claim |
|---|---|---|
| 1 | Income code | Identifies dividends, interest or fund capital gains |
| 2 | Gross income, including tax withheld | Goes on Schedule NEC of Form 1040-NR |
| 3a | Chapter 3 exemption code | Code 04 means a treaty rate or exemption was applied |
| 3b | Chapter 3 tax rate | The rate actually used, such as 30.00 or 15.00 |
| 7a | Federal tax withheld | The tax the payer actually took |
| 9 | Over-withheld tax repaid to you | Amounts the payer already refunded |
| 10 | Total withholding credit | The figure carried to line 25g of Form 1040-NR |
| 13b | Recipient's country code | Must be a treaty country when code 04 is used |
Worked example: Reclaiming tax after a lapsed form
Sofia lives in Mexico, where the treaty rate on portfolio dividends is 10%. Her W-8BEN expired at the end of 2025 and she did not replace it until early 2027, so during 2026 her broker withheld 30% from $2,000 of dividends: $600 instead of $200. Her 2026 Form 1042-S shows $2,000 in box 2, a rate of 30.00 in box 3b and $600 in box 10. She files Form 1040-NR under the simplified procedure, reporting the $2,000 at 10%, a tax of $200, against the $600 credit, and claims a refund of $400.
A refund takes time and effort, so weigh the cost of an ITIN application and a US return against the amount at stake. Keep every Form 1042-S, because the IRS requires proof of the tax withheld.
Risks that change what you receive
- Treaties change. Rates move when a treaty is signed, suspended or ended, as Chile, Russia and Hungary showed in 2024. Hungary's termination reached withholding about 18 months after the US gave notice, and from then on every resident was back at 30%.
- Your form lapses or goes stale. A treaty claim lasts only while the W-8BEN is valid and every statement on it is true.
- Moving country. A new residence brings a new treaty, or none, and a new form is due within 30 days of the move.
- Currency. The dividend is fixed in dollars, while its value in your own currency is not.
- Home-country credit limits. Tax withheld above the treaty rate may earn no credit at home. Australia's tax office, for example, counts only the tax a treaty allows toward its foreign income tax offset and expects the rest to be reclaimed from the other country.
- Estate exposure. Withholding is not the only US tax on US-listed shares. Holdings above $60,000 of US-situated assets can face US estate tax at death, as US estate tax for nonresidents explains.
US law and each treaty set the withholding rate, but local rules decide how the dividend is taxed afterwards and what credit you get for the US tax. A tax professional who knows both systems can confirm the rate that applies to you before you rely on it. For the practical side of holding US shares from abroad, see opening a US brokerage account as a nonresident, the country guides for India and Mexico, and dividend investing basics. The SPY data page shows one widely held US-listed fund whose payouts fall under these rules.