What is withholding tax?Withholding Tax

Tax deducted from a dividend before it reaches your account. Dividends on US stocks paid to non-US residents are withheld at 30% by default, which a tax treaty can reduce.

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US Stock Rules
The Costs Behind Zero Commission, and Dividend Withholding Tax
Zero commission isn't zero cost: there's still the bid-ask spread and small regulatory fees on sales; dividends to non-US residents are withheld at 30% by default, reduced under a tax treaty once you file a W-8BEN.

Related terms

spread
commission
minimum commission
payment for order flow
regulatory fees
Form W-8BEN

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