We love our dividends – well, most do. The Singapore stock market is one of the highest yielding stock markets in APAC and among other developed countries.
However, there is one crucial factor to take note when it comes to dividends from international stocks – foreign withholding tax.
For example, a non-US tax resident investing in the US market pays a 30% foreign withholding tax on all dividends received from US stocks and ETFs.
One common workaround to reduce foreign withholding taxes is to invest in Irish Domiciled UCITS ETFs which reduces the foreign withholding taxes on US dividends to 15%
So, if you want to invest in an S&P 500 ETF, you should consider investing in an Irish Domiciled S&P 500 UCITS ETF because it is the more tax-efficient option.
But is it the more cost-efficient option?
I have broken this article into two parts:
- Part 1: How Irish domiciled ETFs are more tax efficient (this article)