Easy Equities - why are USD dividends reported as local dividends?

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deweyzeph

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So I've just downloaded my Easy Equities USD tax statement/certificate which shows all the USD dividends I've received over the tax year from my USD share portfolio. The strange thing though that it shows the dividends under "Local Dividends" in the statement, not "Foreign Dividends". Anybody else notice this?
 
deweyzeph said:
So I've just downloaded my Easy Equities USD tax statement/certificate which shows all the USD dividends I've received over the tax year from my USD share portfolio. The strange thing though that it shows the dividends under "Local Dividends" in the statement, not "Foreign Dividends". Anybody else notice this?
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Hi, I have seen the same thing on a friend's certificate so seems to be a widespread issue. I am not sure if it is due to the way the shares are held or if it is an oversight on their side.

For example if you buy 1 share of Amazon through Easy Equities I am not 100% sure if you own the underlying share in Amazon or if you are buying a derivative that mirrors the value of it because as far as I know you don't have voting rights in the shares that you hold. If the derivative is based in South Africa then it would be local dividends, but would be great if we could get an official response from Easy Equities.
 
Prometheus27 said:
Hi, I have seen the same thing on a friend's certificate so seems to be a widespread issue. I am not sure if it is due to the way the shares are held or if it is an oversight on their side.

For example if you buy 1 share of Amazon through Easy Equities I am not 100% sure if you own the underlying share in Amazon or if you are buying a derivative that mirrors the value of it because as far as I know you don't have voting rights in the shares that you hold. If the derivative is based in South Africa then it would be local dividends, but would be great if we could get an official response from Easy Equities.
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I did my tax return a few days ago and the dividends from EE were already prepopulated under foreign dividends in the return, so EE is definitely reporting them as foreign dividends to SARS, despite what the tax statement says.
 
deweyzeph said:
I did my tax return a few days ago and the dividends from EE were already prepopulated under foreign dividends in the return, so EE is definitely reporting them as foreign dividends to SARS, despite what the tax statement says.
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That's interesting, I will ask my friend what appears on their return for 2022. In 2021 and 2020 it was a manual process and wasn't prepopulated so they might have changed it this year.
 
Prometheus27 said:
That's interesting, I will ask my friend what appears on their return for 2022. In 2021 and 2020 it was a manual process and wasn't prepopulated so they might have changed it this year.
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Interestingly enough, only the dividend itself was prepopulated, I still had to manually enter the tax credit (i.e. the tax that was paid to the US government) under foreign dividend tax credits.
 
Sorry to hijack this thread, would love to hear which stocks you are receiving dividends from. Just started out on Easy Equities.
 
On the same topic, over the last month I've received dividends from my $ account, money was paid into my R account. Is there a place on EE where you see who, when and how much dividends was paid without having to wait for the annual tax certificate?
 
GrootVoet said:
On the same topic, over the last month I've received dividends from my $ account, money was paid into my R account. Is there a place on EE where you see who, when and how much dividends was paid without having to wait for the annual tax certificate?
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That's very strange. My USD dividends are paid into my USD wallet on Easy Equities. You can go to "Transaction History" (https://platform.easyequities.io/TransactionHistory) and pull a transaction report for your account to see how the breakdown of how the dividend was paid, how much tax was withheld, etc.
 
I can't be sure dividends was paid but my ZA cash reserve did increase so I suspect it was dividends. I can only think it was from my $ account.
 
GrootVoet said:
I can't be sure dividends was paid but my ZA cash reserve did increase so I suspect it was dividends. I can only think it was from my $ account.
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Just check your transaction history. Everything you need to know about anything that's happened in your accounts is detailed there.
 
I can maybe shed some light on the original question (speculation).

This may be a simplification by EasyEquities (likely in agreement with SARS) in order that people pay the appropriate tax on US dividends.

Ordinarily, one would report foreign dividends at an inclusion rate of 20/45, less tax paid as a rebate (limited, IIRC, to the tax due on the foreign dividends).

Anyway, the effect of this is that 45% rate taxpayers would then be paying an additional 5% to SARS on top of the 15% withheld by EE and paid to the IRS (which makes it equal to local div tax of 20%). However, the Double Tax Agreement between the US and South Africa strictly limits dividends tax in total to no more than 15%.

Therefore, unless in some edge cases where there is no withholding on a US dividend, the appropriate dividend tax has already been paid by EE.
Therefore, you would get the correct tax due by reporting them as local dividends else instead overpay (if you're a 36%+ tax payer) if you report them as foreign dividends, unless you make a compensation elsewhere in your return. 31%- taxpayers it wouldn't make a difference.
 
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GrootVoet said:
Stock dividends. Maybe you just don't have stocks that pay dividends or they automatically reinvested.
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I don't know why I only saw your comment a year later.

I own shares in many stocks and ETF's. I get dividends from a fair amount of them.

What doesn't happen is US dividends going to my ZAR account. My US dividends have always gone to my US account. Hence my confusion.

I wonder if op got confused about dividends coming from a local stock. But anyway, looking at the transaction history would answer the question.
 
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