I used to have some shares (from an Italian company) in two Belgian Brokers: Keytrade and BinckBank. Each time I received dividends I paid the Italian dividend tax rate and then on the remainder the Belgium dividend tax rate (I have the Belgian nationality).
I contacted my Belgian Brokers that had the shares and they explained me that I could ask the money back but it was a terribly long procedure and that it would cost me money to do it and would have to wait around 2 months to get the money back. Keytrade told me that they could ask the money back for me but that I would have to pay them 60 Euros for that service ! This is exactly what Keytrade told me:
For foreign equities, a shareholder residing in Belgium always has to pay the tax withholding at source and the Belgian withholding tax. For some countries like France, Italy and Switzerland, one can ask a partial reimbursement of this foreign withholding tax. Unfortunately this request can take up to several months and the different administrations of those countries charge high costs. For each dividend payment there is a minimum cost of 60 EUR.
For further questions do not hesitate to contact us on our address email@example.com.
So for most of us, it does not seem to be interesting to ask for such a refund since we probably do not get a lot of money on each dividend to make it worthwhile.
Binck told me that they do not do that service that I have to ask it directly to the government and gave me a list of forms I had to fill in order to do it. Here is part of what they said:
België heeft met sommige landen een dubbelbelastingverdrag, waardoor het mogelijk wordt om na de oorspronkelijke netto uitkering een gedeelte van de buitenlandse bronheffing te recupereren. Dit is echter een zeer omslachtige en vaak kostelijke procedure. Bovendien geldt een apart formulier en een specifieke procedure voor ieder land van oorsprong.
That basically means that it’s a very annoying difficult long procedure, specifically cumbersome and often costly procedure (omslachtige en vaak kostelijke procedure). I would have to do all the paperwork with the government tax institutions and wait an unspecified amount of time to get the money back.
Annoyed with that information and the crappy brokers I was dealing with I transferred those Italian shares to Interactive Brokers, an international Broker with offices in several countries. I knew that they implemented tax treaties well because I was never charged twice by the dividends I received from my investments in USA, Switzerland or Germany on the shares I bought trough them. Now that I received dividends from that Italian company I pleasantly see that I am charged only by Italy ! I am saving a lot of money by not being taxed again by Belgium, just because Interactive Brokers takes care to implement well the tax treaties between countries and does not leave it to you nor charges you to to get your money back. For you it becomes transparent and you are taxed only the amount established by the tax treaty between your country and the one where you invest.
Fortunately all of my German, Swiss and other international shares with tax treaties are in Interactive Brokers, otherwise I would have had the same problems with them. Be very careful with those kind of things, they can be very easily solved if you use the right broker and if you do not fix it and keep “sucking your thumb”, as Munger would say, they will affect your performance.
I am happy not to be using Keytrade or BinckBank at all now, not only are their commissions much higher than Interactive Brokers but they are extremely inefficient and charge you by default twice on the dividends you receive from companies that are not in Belgium.
Thought it was interesting to let it know since I have heard several complain about being double taxed on dividends with their brokers. Therefore make sure you use the right one that takes care well of international tax treaties and does not leave the task to you or charge you to do it.