I'd like to invest in an oil-refining MLP for those big dividends. Catch: I'm a foreigner, and Uncle Sam insists on withholdhing 39.6% of them. Then my country ignores that, and taxes them on top, making the total tax rate 55%.
How do I get USA not to steal that 40%? Any IRSfags on?
Daily bumpity. Surely there's tons of non-murican /biz/nessmen here?
>>960129
Why would you want to invest in My Little Pony?
>>960129
why do you want MLP's? they have particular tax codes. also, what country? some markets bundle ETFs in their markets with foreign holdings to work under local laws
>>960935
12% dividend and rising, the companies I looked at benefit a lot from low oil prices. Finland.
The MLP ETFs I looked at would be taxed normally, but their dividends are 4-5%, removing the point of investing in them in the first place.
Third-to-last bumpity.
Your government doesn't have a credit for foreign taxes paid?
>>962577
No DTAA mate
>>962577
We do, but the US-FIN tax agreement doesn't cover LPs and MLPs.
Even if it did, 40% is more than the local tax, and way too much in general. I aint paying 40% tax, not in hell.
>>960129
Bad idea OP, dividends are now taxed 90% where youre form
>>960129
Okay, a few points in no particular order.
1. USA is not stealing that 39.6% - its entitled to it (I'll explain).
2. MLPs do not pay dividends. They are distributions (which is usually return of capital). Huge difference particularly as it pertains to taxes. You'll get a K-1 form rather than a 1099 form at the end of the year.
3. Clearly you don't understand the structure of a MLP, hence #1 & 2.
4. You'll likely have to pay USA state taxes in addition to USA federal taxes.
5. MLPs are basically pass through entities so they don't pay taxes. Which means taht unlike dividends, distributions have not been taxed which means you need to pay those taxes. Money earned in the USA needs to be taxed in the USA so that explains why there is no agreement between your country and the USA on credit for foreign tax paid.
Do some reading on this. And get yourself an accountant at tax time - depending on how complex your K-1 is, TurboTax likely won't cut it.
>>963949
>USA is not stealing that 39.6% - its entitled to it
Something tells me that you're not going to survive the 2nd American Revolution.
>>960851
because that fine joicy horse pussy will still overrun normal porn in terms of popularity
>>963957
Because you think I'm a liberal or a conservative? I can't tell...
>>963980
Because you think the government is entitled to anything.
>>963984
Are you implying that some people don't have to contribute to the common good?
>>964002
There is no common good.
I'm not against what could be called user fees. Gas tax or tolls to support roads, stamps to support mail delivery (although there's no logical reason that can't be privatized) water and electricity bills at a rate that they are used, etc.
The government isn't entitled to anything, though.
>>963949
1. It is stealing, as a fair percentage would be 15%, the same as dividends.
2. I do not fill any US tax forms, and have no intention of starting to do so. I do not care what label you stick on the money, functionally it is the same: I buy stock, I get money.
3. I do understand it, and I find the current situation fucked up. US is not entitled to a tax that high. Further, REITs are also pass-through entities, and yet they are covered under standard dividend tax.
>>964966
Expanding on the particular corp type. It is intended for joint ventures between just a few people, and any income they get is considered their personal income.
Under this reasoning, it should be taxed where the person is, aka where the supposed work was done. It is fucked up in more than one way for a country I have never set foot in to personally tax me.
>>964983
>it should be taxed where the person is, aka where the supposed work was done
And the work (oil extraction for instance) is being done in the USA hence USA taxes.
>>965243
Negative. My part of the work, for which I'd get part of the money, was done right where I am. That's the idea of a LP. Each member gets paid for their part.
Also, I like how you completely dismissed the cognitive dissonance with MLP vs REIT.
>>965753
You're the one that asked for advice/explanation. Tough shit if you don't agree, its the way it is though.
With an MLP, you're part of a partnership which is doing the "work" in the USA.
This approximate phrase will be in the MLP's distribution release: "This release serves as qualified notice to nominees as provided for
under Treasury Regulation Section 1.1446
-
4(b)(4) and (d). Please
note that 100 percent of the Partnership’s distributions to foreign
investors are attributable to income that is effectively connected with
a United States trade or business."
Your partnership is a US business and therefore you owe USA taxes.
REITs would normally have a similar treatment except that the treaty you mentioned allows for different tax treatment.
Thanks. So no way to get sane tax behavior for MLPs then, I will invest elsewhere.
