Choosing the correct Country of Legal Residence for non-US persons is important and may provide lower withholding rates. All Interactive Brokers accounts must select a Country of Legal Residence due to regulatory and reporting laws.
The Country of Legal Residence is your tax home. Generally, this is your main place of business, employment, post, regardless of your family home. It is the place where you work or attend school on a long-term basis, permanantly, or indefinitely.
For an entity, the tax home is the place where the entity was formed.
Your Country of Legal Residence is not always the same as your Passport Country. For example, a South African passport holder may attend 4 year university in France. During the study in France, the student tax home would be considered France.
What if I pay taxes in two countries this year?
It is possible to pay taxes in two countries and to be considered a Legal Resident of both countries during the same year. When completing an account application, your choice would be the country in which you currently live and will pay taxes to.
What if I do not have a regular place of business?
In some cases, persons may not have a regular place of business or home. Your tax home is the place where you live on a regular basis or wherever you work at the time of your application submission.
What if none of these applies?
Your Country of Legal Residence is wherever you work.
For additional help determining your status as either a non-US Legal Resident or a US Legal Resident, visit www.irs.gov to review the IRS Publication 519 or visit http://www.irs.gov/publications/p519/index.html
Disclaimer: IB does not provide tax advice. These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any international, federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor. We recommend that you consult a qualified tax adviser or refer to the U.S. Internal Revenue Service.