Does this apply to me?
If your account earns US source ‘fixed or determinable, annual or periodical (FDAP) income’, Euro Pacific Bank (and Euro Pacific Securities, Inc.) is mandated to report this US source FDAP income to the IRS on your behalf, regardless of your residence jurisdiction.
The United States requires all withholding agents to file an information return, known as a Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, to report amounts paid to foreign persons that are described under the Amounts Subject to NRA Withholding and Reporting, which includes all Fixed or determinable, annual or periodical (FDAP) income.
IRS EXPANSION OF REPORTING SCOPE
Please note as of January 2017, IRS Section 871(m), has expanded the scope of reporting requirements to include single stock CFDs with a US equity as an underlying asset.
How much does the filing cost?
The cost of filing is $200.00 per account, each year that an account holds investments that pay interest or dividends attributed as ‘US source income’. This means that even if a investment/security has a one-time payment, a filing will need to be made.
This reporting is mandatory and required of all firms offering investments, whereby those investments pay interest or dividends attributed as ‘US source income’. Unfortunately, due to the prohibitive cost of complying, Euro Pacific Bank and Euro Pacific Securities must pass on the cost of these filings to our clients.
Can I avoid this annual filing cost?
If you currently have a Euro Pacific Trader brokerage account and all of your stock positions have been allocated as of January 1, 2020, you will not be assessed an annual filing fee moving forward, as our new brokerage custodian Interactive Brokers1 handles all U.S. Source Income reporting for us.
If you had stock positions migrated from our previous brokerage platform, Global TradeStation (GTS), to Interactive Brokers and those positions have not been allocated to a live Euro Pacific Trader account, we will continue to assess a $200 annual fee to cover the reporting costs and additional overhead.
We therefore urge you to contact our Sales & Trading team to either close or allocate your stock positions as soon as possible, by creating a case or scheduling a call. For the most up-to-date information on the Bank’s reporting requirements to the IRS please review their website directly.
1Euro Pacific Trader is offered by Euro Pacific Securities Inc. (“Euro Pacific Securities”), as an Introducing Broker to Interactive Brokers LLC. Interactive Brokers LLC is the custodian, technology provider, and clearing broker to all transactions executed through Euro Pacific Trader and thus the rates, conditions, and examples shown on this site may be subject to change and differ from what is displayed on Euro Pacific Trader. The rates, conditions, and examples on this site are provided on a best-efforts basis and should not be taken as final.
Euro Pacific Securities will not be held responsible for pricing and conditional discrepancies that may arise in the normal course of offering Euro Pacific Trader. Customers should always review and rely on the conditions that are shown directly on Euro Pacific Trader, and it is the responsibility of all customers to carefully review the conditions of every action before approving execution on Euro Pacific Trader.
Interactive Brokers LLC is a registered Broker-Dealer, Futures Commission Merchant and Forex Dealer Member, regulated by the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA), and is a member of the Financial Industry Regulatory Authority (FINRA) and several other self-regulatory organizations. Interactive Brokers LLC does not endorse or recommend any introducing brokers, third-party financial advisors or hedge funds, including Euro Pacific Securities. Interactive Brokers LLC provides execution and clearing services to customers. None of the information contained herein constitutes a recommendation, offer, or solicitation of an offer by Interactive Brokers LLC to buy, sell or hold any security, financial product or instrument or to engage in any specific investment strategy. Interactive Brokers LLC makes no representation, and assumes no liability to the accuracy or completeness of the information provided on this website.
For more information regarding Interactive Brokers, please visit www.interactivebrokers.com.
