What taxes am I liable for with Sarwa?

Please see below an explanation of the different taxes you are liable for with Sarwa. 

For UAE residents*:

Type of Tax

Definition

Does it apply to Sarwa Invest

Does it apply to Sarwa Trade

1. Dividend Withholding Tax

A Dividend withholding tax is the tax a company must take off a dividend before the payment is made to the shareholder. 

In the case of US Domiciled ETF’s, the Dividend Withholding tax rate is 30% on dividends. 

For example, if an US Domiciled ETF is paying a dividend of $1, you would receive $0.7 in your Sarwa account.

Since this tax is automatically deducted at source, there is no reporting required and you do not have to worry about it!

Yes**

Yes

2. Estate Tax

The estate tax in the United States is a federal tax on the transfer of the estate of a person who dies.

This is a 40% tax on all investments greater than 60,000 USD. This exclusively applies in case of death.

No

Yes


Notes:

* Please note that there is no Capital Gains Tax for UAE Residents

** Sarwa Classic accounts are subject to a 15% Dividend Withholding Tax. This is because Sarwa Classic accounts are converted with your consent from US Domiciled ETFs to Irish Domiciled ETFs to shelter from US Estate Tax

For Non- UAE Residents

Dividend Withholding Tax and US Estate Tax treatment for Non-UAE Residents is the same as UAE residents, however when it comes to Capital Gains Tax, this is dependent on your tax residency.  Kindly refer to a tax advisor or tax expert in your country of residence for more information relevant to your circumstances.  Tax guidelines differ from country to country, please take the above as general guidelines. We highly encourage you to consult with your tax lawyer for your unique situation. 

Was this article helpful?
0 out of 0 found this helpful

Comments

0 comments

Please sign in to leave a comment.