RetireJapan

I am speaking with a representative at IBKR to transfer my overseas assets to an IBKR account that works with Japan (the reason is to have the correct dividend payments of 10% on US assets rather than 25% like I have at the moment)

I was told to consult with a Tax professional in situations like these, but I am confused so perhaps I am missing something basic here.

Does sending some ETFs from one brokerage account to another (under the same owner name) incur capital gain tax? This sounds ludicrous to me, if it is true that such thing happens what country takes that tax? Is it withheld at source?
If it is true that I need to consult with a tax professional, where should I seek that professional? In the source country? Or the target country?
These are assets I was planning to save until retirement so no plans on selling in the near future.

Anyone did a similar transfer and can share his experiences?

Thanks for the help!

You'd be in trouble if you sold the position and then just bought it back in the new brokerage account. I've used ACATS to transfer positions to interactive brokers. There was a problem because the tax IDs on the accounts didn't match, because the positions were going from an account with my US address and social security number to an account with my Japanese address and my number. The solution turned out to do a "partial" ACATS, listing all the positions individually.

Are you a US Citizen?

If not, then you should request to Broker to send you a W8-BEN Form, which you need to fill out to claim the benefits of the Japan-US Tax Treaty on Dividends.

Any Foreign National (non-US Citizen), including Japanese, who is filing a W8-BEN should in Part II state:

Part II Claim of Tax Treaty Benefits (for chapter 3 purposes only) (see instructions)
9. I certify that the beneficial owner is a resident of ___JAPAN___ within the meaning of the income tax treaty between the United States and that country.
10. Special rates and conditions (if applicable—see instructions): The beneficial owner is claiming the provisions of Article and paragraph
_10 2(b), 11 2(b)_ of the treaty identified on line 9 above to claim a ___10___ % rate of withholding on (specify type of income):
___Dividend and Interest Income___
Explain the additional conditions in the Article and paragraph the beneficial owner meets to be eligible for the rate of withholding:
___As A Resident Of Japan for Tax Purposes.___

The US Government will then withhold US Tax due to Uncle Sam at 10%


You then need to declare the dividends in your Kakutei Shinkoku Tax Return Filing. Under Separate Self-Assessment Taxation Method, the tax rate on Dividends is 15% National, 0.315% Reconstruction, and 5% Residential Taxes.
You pay these in Japan.

Then, your broker should send you a Statement Of US Taxes Withheld, 1042-S in time for US Tax Filing.

You then reopen your Kakutei Shinkoku Tax Return Filing and enter the value for the amount of Tax Withheld into Form B - pAge - Item 46 - Foreign Tax Credit. You will then receive that amount in a Tax Refund from the Japan Tax Agency.
You end up paying
10% US Withholding, and in Japan, 5% National, 0.315% Reconstruction, and 5% Residential Taxes.

This will be the same whether you hold these in Japan or off-shore (assuming your are Permanent Resident For Tax Purposes).