How do you guys invest?

[jstar]

I think you oversimplify and don’t consider the (non)existing tax treaties. It is not so simple as to just say; “I don’t live here (anymore) so please don’t tax my capital gains please”.

An example: In The Netherlands, you’d pay 15% on foreign dividend. If there is a tax treaty, you are able to get that piece of the withholding tax back. Quite some banks or brokers don’t offer the service of applying the lower tariff (relief at source) where you were entitled to, so a tax reclaim is the only way. Then you need to apply with the foreign tax authorities. Every country has a unique form to apply for reclaims and there are often costs involved. In Germany you can only recuperate if you receive at least €150 in dividends btw (per position!).

In Belgium you even pay 30% so you can imagine what it means to have stock in other countries, esp, without a tax treaty. In many cases that withholding tax was 25-30% so it really adds up and you still pay extra after recovering a 15% or so..

 

[jstar]

Btw, I‘m quite glad now I took the profit on Tesla before the stock split. It is quite amazing what is happening there.

Obviously there are some (external) reasons why it’s somewhat cumbersome. The stagnating sales in China, the government there being difficult, the competition of BYD and NIO etc. Then there’s the constant delay of the Cybertruck. And the European (and Korean!) manufacturers as VW (with Audi and Porsche), Volvo/Polestar and KIA/Hyundai/Genesis also finally discovered the EV. Then there’s huge issues with the Indian government with an impasse on the factory there. The Berlin factory is also not optimal yet in its output (only 2 colors, the others from China).

But the whole Twitter going down the drain saga taking up time and focus from Musk definitely doesn’t help either. And as cherry on the cake he alienates his followers and (potential) customers with radical political statements. Let’s face it, a lower class white factory worker in America’s rural areas doesn’t really want to buy a model S. And you can be against subsidies but even a dog doesn’t bite the hand that feeds him.

Having said that, I personally don't see lower than a $100 on the horizon; the PepsiCo trucks are good news and the CyberTrucks are finally being built as we speak. A newer model 3 with major cost cutting techniques (as the model Y) is announced and a model 2 in the pipeline would also improve the situation.

 

[Will_M]

Be greedy when others are fearful.

 

[make_batik_great_again]

I think you oversimplify and don’t consider the (non)existing tax treaties. It is not so simple as to just say; “I don’t live here (anymore) so please don’t tax my capital gains please”.

An example: In The Netherlands, you’d pay 15% on foreign dividend. If there is a tax treaty, you are able to get that piece of the withholding tax back. Quite some banks or brokers don’t offer the service of applying the lower tariff (relief at source) where you were entitled to, so a tax reclaim is the only way. Then you need to apply with the foreign tax authorities. Every country has a unique form to apply for reclaims and there are often costs involved. In Germany you can only recuperate if you receive at least €150 in dividends btw (per position!).

In Belgium you even pay 30% so you can imagine what it means to have stock in other countries, esp, without a tax treaty. In many cases that withholding tax was 25-30% so it really adds up and you still pay extra after recovering a 15% or so..

Well, putting withholding taxes aside, it seems to be as simple as I described (at least, in the case that I mentioned (Germany)). The broker will not derive taxes automatically anymore (except withholding taxes, as mentioned) and you will have to declare taxes in the country where you are tax resident by yourself then. I heard of German people who live in Georgia (the country, not the state in the US) and who could continue using their German broker that way. If they get dividends, they have to report those in Georgia then and, if in the country where the dividend-paying company is located there is a withholding tax, this withh. tax will of course be derived. But Germany (the location of the broker in this case) will not tax them as well if they are not a tax-resident in Germany anymore. And I assume, only the double tax treaty between Georgia and the country where the div-paying company is located should matter for them. No guarantee from me, just what I heard and also read about this topic.

Regarding withholding taxes and (non)existing double tax treaties, I agree with you. This can be a complex topic. But is it different if you use a Singaporean broker? If you are tax-resident in Indonesia only and you only own stocks from countries where there is no withholding tax (e.g. UK) or from companies that do not pay dividends, then the case should be quite simple, even if you use a broker from abroad. If I oversee something, please correct me.

If you receive dividends that are subject to withholding tax, then it could be disadvantageous. Because I agree with you that the broker will probably not check for you if you are qualified for a lower withh. tax tariff because he will not check every double tax treaty between Indonesia and many other countries for you. Except you are a very, very wealthy and important customer to the bank So, the broker will probably derive the standard withholding tax tariff from your dividends (even if you qualify for a lower rate). And if you are qualified for a lower tariff, you will have to reclaim by yourself (which can be time and cost-consuming). One reason for me not to invest in dividend-paying companies from France for example.

If you are lucky you can maybe get a lower tariff on US dividends by sending your broker the W8-BEN formular. Seemed to work out for a German that lives in Cyprus now and still uses his broker in Germany since Cyprus has a double tax treaty with the US that limits withh. tax to 15% on dividends. After sending his broker, the W8-BEN formular he got the reduced rate on US dividends. If I remember correctly, Indonesia has a similar agreement with the US.

 

[make_batik_great_again]

But the whole Twitter going down the drain saga taking up time and focus from Musk definitely doesn’t help either. And as cherry on the cake he alienates his followers and (potential) customers with radical political statements. Let’s face it, a lower class white factory worker in America’s rural areas doesn’t really want to buy a model S. And you can be against subsidies but even a dog doesn’t bite the hand that feeds him.

Yes, and also not helpful (short-term) is that he had to sell a lot of his Tesla shares for the purchase of Twitter.

 

[make_batik_great_again]

Has anyone of you experience with ETFs from Ireland as a tax-resident in Indonesia?

In the EU I did not have to pay withholding taxes on the distributions received from the ETF. But as far as I know there is no double tax treaty between Ireland and Indonesia. So, I assume Indonesian tax-residents would have to pay 20 or 25% Irish withholding taxes (as for dividends from Irish companies). Or are ETF distributions treated differently than dividends from Irish companies?

 

[jstar]

Has anyone of you experience with ETFs from Ireland as a tax-resident in Indonesia?

In the EU I did not have to pay withholding taxes on the distributions received from the ETF. But as far as I know there is no double tax treaty between Ireland and Indonesia. So, I assume Indonesian tax-residents would have to pay 20 or 25% Irish withholding taxes (as for dividends from Irish companies). Or are ETF distributions treated differently than dividends from Irish companies?

Assuming you‘re a foreigner here who lives (or intends!) to stay in Indonesia for more than 183 days in one year and fall under the PPh 21. (Or is it 23?) I do see some dark clouds though.

The distribution from a managed fund is not exactly the same as the dividend on stock so I don’t know how the local Indonesian Pajak officer would see that. In one case the gross amount from the investment will be subject to income tax of 0.1%. That is under the assumption the ETF shares are considered to be listed on the stock exchange, otherwise the PPh rate would be much higher, namely 25%.

Or if they agree the managed fund pays ‘dividend’ as a single company it is (by heart I didn’t keep up) 10% for individuals.

If you don’t have a NPWP all these charges would be doubled. And that’s not enough; according to the tax authorities a Value Added Tax of 10 (or 11 now) percent should be applied on transactions. Then depending on whether you sell or buy the ETF, and how high the amount is, you could be charged between 0,14 and 0,24%.

But (how) do they consider the trade of securities within the fund? And if they really want to make it complicated; the final income tax for the taxed sales of shares is imposed regardless of whether the sale of shares results in a profit or loss.

 

[make_batik_great_again]

Assuming you‘re a foreigner here who lives (or intends!) to stay in Indonesia for more than 183 days in one year and fall under the PPh 21. (Or is it 23?) I do see some dark clouds though.

The distribution from a managed fund is not exactly the same as the dividend on stock so I don’t know how the local Indonesian Pajak officer would see that. In one case the gross amount from the investment will be subject to income tax of 0.1%. That is under the assumption the ETF shares are considered to be listed on the stock exchange, otherwise the PPh rate would be much higher, namely 25%.

Or if they agree the managed fund pays ‘dividend’ as a single company it is (by heart I didn’t keep up) 10% for individuals.

If you don’t have a NPWP all these charges would be doubled. And that’s not enough; according to the tax authorities a Value Added Tax of 10 (or 11 now) percent should be applied on transactions. Then depending on whether you sell or buy the ETF, and how high the amount is, you could be charged between 0,14 and 0,24%.

But (how) do they consider the trade of securities within the fund? And if they really want to make it complicated; the final income tax for the taxed sales of shares is imposed regardless of whether the sale of shares results in a profit or loss.

Thanks for your answer.

If they regard it as a dividend, then it should be treated as usual income. The rule of 10% on dividends applies only on dividends from Indonesian companies. For Dividends from stock-listed companies from overseas your personal income tax rate is relevant since overseas dividends count as regular income. That is what I was told at the tax office.

But my question aimed more on the Irish withholding tax. Since there seems to be no double tax treaty between Ireland and Indonesia, this is probably more a question regarding Irish law. But since ETFs are quite popular, I thought maybe someone of you guys already has experience with Irish ETFs as an Indonesian tax-resident On dividends they (Ireland) derive 20 or 25% withholding taxes as far as I know. But I don‘t know if they have a different rule regarding ETFs.

 

[gemima]

Thanks for your answer.

If they regard it as a dividend, then it should be treated as usual income. The rule of 10% on dividends applies only on dividends from Indonesian companies. For Dividends from stock-listed companies from overseas your personal income tax rate is relevant since overseas dividends count as regular income. That is what I was told at the tax office.

But my question aimed more on the Irish withholding tax. Since there seems to be no double tax treaty between Ireland and Indonesia, this is probably more a question regarding Irish law. But since ETFs are quite popular, I thought maybe someone of you guys already has experience with Irish ETFs as an Indonesian tax-resident On dividends they (Ireland) derive 20 or 25% withholding taxes as far as I know. But I don‘t know if they have a different rule regarding ETFs.

I'm Irish and if you are resident in ireland EFTs are a bad choice for investing in due to the taxation arrangements in place in Ireland.

If you are non-resident you don't have to pay those taxes -
"Income and gains arising from investments into Irish and EU domiciled ETFs are subject to income tax at a rate of 41% on a self-assessment basis. Such income and gains are not subject to Pay Related Social Insurance (PRSI) or Universal Social Charge (USC) liabilities. This charge to tax does not apply in the case of unit holders who are non-resident. In the case of non-resident investors, liability to tax on gains from the fund will be determined in their home jurisdiction."

Taken from a statement made by the Finance minister in 2022: https://www.oireachtas.ie/en/debate... arising from,Social Charge (USC) liabilities.

 

[make_batik_great_again]

I'm Irish and if you are resident in ireland EFTs are a bad choice for investing in due to the taxation arrangements in place in Ireland.

If you are non-resident you don't have to pay those taxes -
"Income and gains arising from investments into Irish and EU domiciled ETFs are subject to income tax at a rate of 41% on a self-assessment basis. Such income and gains are not subject to Pay Related Social Insurance (PRSI) or Universal Social Charge (USC) liabilities. This charge to tax does not apply in the case of unit holders who are non-resident. In the case of non-resident investors, liability to tax on gains from the fund will be determined in their home jurisdiction."

Taken from a statement made by the Finance minister in 2022: https://www.oireachtas.ie/en/debates/question/2022-04-27/75/#:~:text=Income and gains arising from,Social Charge (USC) liabilities.

Thank you very much for the information.

Yeah, actually I find it irritating that a country that is so attractive and beneficial for ETF providers is at the same time that harsh to their own population when it comes to taxation of index funds (41% ). I don‘t understand why Ireland is not encouraging the own population more to invest in ETFs although the government seems to clearly understand the benefit from that.

But from what you quote it seems that non-Irish and non-residents are not involved then.

Still I need to get a clearer picture of the taxation of index funds in Indonesia...I assume the tax regulation is similar to overseas dividends. But I don‘t know for sure.

 

[pantaiema]

Has anyone of you experience with ETFs from Ireland as a tax-resident in Indonesia?

In the EU I did not have to pay withholding taxes on the distributions received from the ETF. But as far as I know there is no double tax treaty between Ireland and Indonesia. So, I assume Indonesian tax-residents would have to pay 20 or 25% Irish withholding taxes (as for dividends from Irish companies). Or are ETF distributions treated differently than dividends from Irish companies?

I do not know about IE but I know in the UK you could avoid withholding tax by using tax free wrapper. Example of that is ISA, SIIP. I believe similar arrangement available in IE ?

What taxes will I have to pay on investments in my Personal Pension?

It usually takes 6 to 10 weeks for us to claim basic rate tax relief for you from HMRC and add it to your Personal Pension.

www.vanguardinvestor.co.uk

"As a UK taxpayer you get a tax-free dividend allowance each year and you'll only have to pay income tax on dividends that go over that amount. You can find more information about dividend tax and the current dividend allowance on HMRC's website."

 

[Wally]

I do not know about IE but I know in the UK you could avoid withholding tax by using tax free wrapper. Example of that is ISA, SIIP. I believe similar arrangement available in IE ?

What taxes will I have to pay on investments in my Personal Pension?

It usually takes 6 to 10 weeks for us to claim basic rate tax relief for you from HMRC and add it to your Personal Pension.

www.vanguardinvestor.co.uk

"As a UK taxpayer you get a tax-free dividend allowance each year and you'll only have to pay income tax on dividends that go over that amount. You can find more information about dividend tax and the current dividend allowance on HMRC's website."

UK non-residents are not allowed to open ISAs (tax free individual savings accounts). But non-residents are also not liable to tax on dividends or capital gains on shares, ETFs and funds. If you are a UK citizen and non-resident, it is best to live a country that does not tax you on world-wide income (only on local income). I think that Thailand and possibly Malaysia do that. Indonesia, of course. taxes on world-wide income but does have a double taxation treaty with the UK. Under this treaty UK pensions paid by the government are exempt from Indonesian tax

 

[jstar]

Seabank, the digital bank which belongs to the same group as Shopee for instance, has changed its deposito rates.

If you take one month, the interest rate is 6%. For three months it is 7%. You need to ‘roll over’ every time the period ends. They apply a 5% on the regular savings account.

 

[snpark]

You better clarify that's per year. Not for the one month

 

[Ruserious]

If you take one month, the interest rate is 6%. For three months it is 7%. You need to ‘roll over’ every time the period ends. They apply a 5% on the regular savings account.

Thats pretty good. Do you think they are safe and trustworthy? Most bank deposit rates are about 4% after tax at the moment and for some reason here they really try to overcomplicte it with promotions and new user benefits.

 

[jstar]

You better clarify that's per year. Not for the one month

You’re right and it’s before them withholding tax (20%) also. So then it is 0,8 x (6% / 12) which results in a 0,4% (400.000 rupiah on a deposited 100 juta for instance) for one month only.

Thats pretty good. Do you think they are safe and trustworthy? Most bank deposit rates are about 4% after tax at the moment and for some reason here they really try to overcomplicte it with promotions and new user benefits.

Yeah you get all this suitcase for free crap but some offer cash(back). I don’t see a problem with banks like this or an alternative as Jenius from BTPN, that belongs to Sumitomo Mitsui Banking Corporation (SMBC), a large Japanese bank. They are recognized by BI so there’s LPS (with restrictions).

 

[jstar]

OCBC has a rather interesting product called Nyala. We are going to try this and see if it makes sense.

You get a debit card and certain facilities. It should be advantageous for (free) cash withdrawals at other random ATM’s, economical for overseas use and also multi currency, offering free interbank transfers and profitable forex.

Kelola & Optimalkan Aset Secara Digital, Nyala OCBC NISP

Cashback hingga Rp580 ribu dengan kode promo

www.ocbcnisp.com

English version:

Nyala

Manage your finances and optimize your assets with Nyala OCBC NISP digital banking services. Find more details here!

www.ocbcnisp.com

 

[snpark]

I certainly would never trust a digital bank with my money

Where are you going to go if there is a problem? A call centre in Hyderabad?

Bricks and mortar banks where you can sit down, talk, meet someone, etc and then of course access through the app or website
These days a lot of banks have better rates if you ask

As I mention before, existing HSBC customers can access online a High Rate Savings account that used to pay 4% now down to 3%
BCA through WELMA have higher rates
And of course bonds paying now 5-6%

 

[jstar]

I certainly would never trust a digital bank with my money

Where are you going to go if there is a problem?

If. If my uncle had boobs he would be my auntie, Stephen.

I have had first hand experience (my father and uncle ) with the situation where the good housefather investor who bought stock in Fortis bank for decades since “it could never fail”, got screwed by his own (Belgian and Dutch) government and lost practically all his savings.

And the monthly costs of those traditional banks are amazingly high; my Citibank US only breaks even since my US stock dividend is deposited in that account. They charge even more if you live abroad. Their app can not be downloaded and upgraded in Asia so I can’t do proper online banking. And if I call them to ask why my debit card did not arrive yet, I also get to speak to someone in nowheresville.

So my experience with the traditional banks has not been that great. And there’s risk in everything you do, even in putting it in a sock

 

[snpark]

As Ted said (the movie)
There's no chicks with dicks
Only men with boobs
Lol
Well each to their own

I never heard of anyone losing money from a bank
But plenty of people stung by crypto etc
My point was try reaching the Helpdesk for a digital bank that's gone tits up.
Anyway everyone has their own way

Very very rare for an actual bank to go bankrupt in a western country.