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    frankr2327's Avatar
    frankr2327 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Nov 11, 2009, 10:11 AM
    Tax treaty with China
    I am a financial advisor. I have friends who are residents of China that would like to invest in mutual funds, real estate, and annuities here in the United States. They are Chinese citizens - no social security number. Can this be done and is there a 30% backup withholding rate for any gains? Or is there a tax treaty in place with China that excludes or reduces that rate?
    MukatA's Avatar
    MukatA Posts: 7,110, Reputation: 176
    Tax Expert
    		  
    #2

    Nov 12, 2009, 12:55 AM

    Profits from mutual funds or stock sales in not taxable in case of non-residents. They will file Form W-8BEN with the broker to report the non-resident status.
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #3

    Nov 12, 2009, 09:58 AM
    I recommend that they use Charles Schwab, who caters to international clients and whose website is available in Chinese.
    Five Rings's Avatar
    Five Rings Posts: 459, Reputation: 7
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    #4

    Nov 12, 2009, 01:29 PM

    As their financial advisor I suggest you first familiarize yourself with the US/China treaty;
    http://www.irs.gov/pub/irs-trty/china.pdf
    And the interpretation:
    http://www.irs.gov/pub/irs-trty/chintech.pdf

    That will acquaint you with the treaty benefits to your clients are entitled.

    From the scope of the investment interests you describe they will need ITINs:
    http://www.irs.gov/pub/irs-pdf/fw7.pdf

    Real estate investments require special attention:
    ITIN Guidance for Foreign Property Buyers/Sellers
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