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Stock split tax implications for non-US shareholders
- Thread starter junas
- Start date
To give a more positive note, our German Tax advisors and Brookers have less knowledge about that matter compared to some of us. There is a tendency too to stay on the negative side to surprise you later to the positive versus the other way around. If the are right they can claim they told you so but if they are wrong its a positive for you.
Although they may be right I question their knowledge and ability to understand the matter we discuss.
Concerning Google, IMO it is not an event that can be compared because it is a different sort of stocks that has been delivered which is not the case with Tesla.
About the acting after the fact situation, that is likely but does of course not give us any indication what the decision will be but only that we likely won't get formal information up -ront like a decent tax authority would handle it.
Thanks Much !
This sounds to be another belgium story as I called them 3 times and asked a confirmation by e-mail and in my e-mail it is stated 99% chance of not being taxed. The only difference is that I was talking to the french speaking part of Binck bank
It sounds they are not even aligned within the same bank... 
This is correct there is NO tax on the money you can make with Stock Gains with exception on dividend, either in cash or in stock. Although the spirit of the Tesla split is indeed a standard regressive Stock split, Tesla has been using the word "Dividend" in their communication. This is the reason why so much people are concerned to better understand the taxes implications : Dividend in most EU countries (not US) are taxes between 20 to 30% (i.e. Belgium is 30%).
While it seems more confirmations are collected to validate that there will be NO Tax on the split, the belgian Tax authority has stated that they need more info before fully confirming if No taxes are due. The issue is that ONLY Tesla would know the exact details of the split transaction. I've been asking them to clarify this through their ir.tesla.com contact mail and I recommend all of the users of this blog to do the same . Time is ticking...
This is correct there is NO tax on the money you can make with Stock Gains with exception on dividend, either in cash or in stock. Although the spirit of the Tesla split is indeed a standard regressive Stock split, Tesla has been using the word "Dividend" in their communication. This is the reason why so much people are concerned to better understand the taxes implications : Dividend in most EU countries (not US) are taxes between 20 to 30% (i.e. Belgium is 30%).
While it seems more confirmations are collected to validate that there will be NO Tax on the split, the belgian Tax authority has stated that they need more info before fully confirming if No taxes are due. The issue is that ONLY Tesla would know the exact details of the split transaction. I've been asking them to clarify this through their ir.tesla.com contact mail and I recommend all of the users of this blog to do the same . Time is ticking...
I have been in mail exchange with Tesla IR (Martin Viecha) and they do confirm that no taxes are due. That's all that they can do!
Please do not bombard Martin and iR with mails who they really try their vest to help us. The looked at it from every angle and confirm it's NOT taxable. While I, of course, believe him I am not certain that some tax authorities don't understand or don't want to understand.
The issue is not Tesla IR but the Tax authorities who don't give any, a proper or clear answer. While it sounds like Belgium is unclear, Germany does not give an answer at all.
I love the opportunity this thread gives me to practice tetralingual skills. Not worried in the least about dividend tax. In NL you can recuperate those on your income tax declaration. Not so in B, or D?
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Dear Ipe, unfortunately that's not the case in Germany. Since 2009 you need to pay 26.375% taxes for stock gains and dividends.
The trade off is that you at least don't need to pay wealth tax in Germany. As long as you don't sell your stocks the government can't demand taxes. Even if you would sitt on several multimillions of gains like a Dragon on a a pile of gold, they can't do anything.
Only on dividends the banks will automatically forward the taxes to the government, because dividends are paid continously and therefore a financial transaction occurs.TThis automatic forwarding happens in case of stock sells too.
And that is exactly the problem for me. I don't want to sell Tesla shares and therefore don't want to pay this tax. Somewhere in the far future I might want to sell and then of course I will pay the taxes.
But if the Tesla split is interpreted as a dividend then I have to pay instantly my taxes. It doesn't matter if I have gains or not in the stock. The argument would be share price x 4/5 x 26,375% = tax amount. And that happened back in 2014 in case of the Google split. A lot of people paid taxes although they had no gains in their Google shares due to the 2:1 split. So in worst case they bought the shares 1 day ahead of the split and had to pay taxes of 26,375% for the additional Google B stocks although they had no winnings. In my case I was sitting on a lot of gains and therefore I didn't have to pay taxes for nothing, but could argue that I have on the other hand not to pay taxes for the sell-off of my Google A shares. But still the sell was forced on me as I didn't want to sell my Google shares, but I had to do to cover the tax demand from my broker.
I'm here because due to this messed up situation back in 2014 I am very very careful and want to ensure that such a thing doesn't happen to me today again. That's why I demanded statements from the government BMF, my Broker and Tesla IR in advance and seeking for people in the same situation. And that's why I am here in this forum and glad to see that we have high quality people here with obviously an over the average IQ and stock market understanding. I wished I would live in a community with people of that quality, but I understand that a small percentage of people are on this level and this forum works just as a amplifier bringing these people around the world together.
If somehow this Trsla split situation leads to a tax payment due to our government, the broker or other entities like the Wertpapiermeldestelle, then I'm quit sure I'm done with being a German resident. The socialist tendencies startet becoming inconvenient a while ago and this topic we are discussing since 4 days in this thread is just one major issue beside the newly announced unfair taxation rules for stock owners, especially traders, beginning with 2021 and beside the upcoming election year with a rise of socialist ideas like additinal wealth taxes in addition to the already high tax rates for high incomes. Together with the high rates for social security and health care this is leading to a payment of over half of your income, when you are a high tier employee.
So I don't want to grind off from the subject of this thread. But if you think about it, then you will realize that I'm in this situation because I'm not in a tax heaven like a 10+ million JP Morgan customer, but I am dependent from mediocre brokers and a, in my opinion, incompetent German goverment, who thinks it's okay to do nothing until something (Tesla split) happens and then to decide in their interest as a tax receiving entity to collect the money (Tesla split taxes) and then to expect me to take legal action to overrule this decision (BMF statement a year later in regards to the unfair google split tax demand in 2014 due to protests from stock owners) and when I am spoken right afterwards they even don't pay the taxes back but give me some kind of voucher cupon llike store to which I have returned some kind of clothes to get my next purchase for free. And they call this Verlustverrechnungstopf. Some people would call this theft.
Thanks to you guys, but as I won't have any new information until split happens, I guess I will be a passive reader again of this great forum. Of course I will read frequently and comment when I have new informations in regards of the Tesla split in Germany. Please keep us informed in case of new informations. In additon as many people as possible are addressing their brokers and the BMF to make a loud noise the better for all of us as this shows them to deal with the situation now and not next year. The official corrective statements and so called delta corrections of taxes in regards to the Google split were made years later in the bank accounts. Hopefully this time this doesn't happen.
Of course as always above mentioned statements are no financial advises and/or my personal opinion. I'm just a private person and don't work for any private finance company or government institutions and have no profession in tax or financial matters with any kind of official degree.
Kind regards
Amon
Thanks, Amon,
agree to your post and for me, it would be plain fraud if the Germany Government would execute taxes as its a Capital Gain Tax and we do not have any capital gains, therefore no taxes should be requested. I am certain many other Germans are in a similar situation we are in. If they still do it I would be willing to sue maybe with a group of people as a Sammelklage if possible. Takes years but I would not accept a based on laws and regulations illegal behavior.
The way the word Dividend is used in the tax regulation does not comply with what Tesla is using it for therefore I have some hope that they don't do something stupid.
Two questions to the forum:
I did read that there is kind of a BMF notification done for Depots that will help them to determine if they do an automated tax deduction which would force many to sell stocks. Can you elaborate on that and what do we know until now?
Some got feedback from the BMF, can you send that to me as I still wait for their answer?
Thx
My Austrian broker said that this won't be a taxable event, assuming this is a normal split. I'm not convinced it is a normal split though. This is what they said:
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Sehr geehrter Herr Einstein,
vielen Dank für Ihre Anfrage.
Ein "normaler" Split, durch den Sie zusätzlich neue Aktien bekommen, hat in der Regel keine steuerliche Auswirkung,
Der steuerliche Anschaffungswert wird auf die gesamte Stückanzahl aufgeteilt. Dadurch, dass zusätzliche Stücke eingebucht werden, verringert sich der steuerliche Einstandskurs.
Die steuerlichen Informationen zu Ihren Positionen können Sie jederzeit über den KESt-Status-Bericht abfragen.
Bei Fragen stehen wir Ihnen gerne zur Verfügung.
Mit freundlichen Grüßen
===
Anyone in Austria have any more information on this?
===
Sehr geehrter Herr Einstein,
vielen Dank für Ihre Anfrage.
Ein "normaler" Split, durch den Sie zusätzlich neue Aktien bekommen, hat in der Regel keine steuerliche Auswirkung,
Der steuerliche Anschaffungswert wird auf die gesamte Stückanzahl aufgeteilt. Dadurch, dass zusätzliche Stücke eingebucht werden, verringert sich der steuerliche Einstandskurs.
Die steuerlichen Informationen zu Ihren Positionen können Sie jederzeit über den KESt-Status-Bericht abfragen.
Bei Fragen stehen wir Ihnen gerne zur Verfügung.
Mit freundlichen Grüßen
===
Anyone in Austria have any more information on this?
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Thanks Much !
This sounds to be another belgium story as I called them 3 times and asked a confirmation by e-mail and in my e-mail it is stated 99% chance of not being taxed. The only difference is that I was talking to the french speaking part of Binck bank
View attachment 576492View attachment 576492
Thanks! Will keep it in the casre somethign goes wrong
Avec plaisir!
Yes, this is what they wrote in an email (which was sent to all enquirers):
It is our current understanding of the operation that it concerns a simple division of shares, without enrichment of the stockholder, or impoverishment of the issuing company. So the operation doesn’t seem to be regarded as a dividend on which tax should be withheld, and Keytrade Bank doesn’t envisage withholding a tax on the operation.
Attention: this interpretation of the operation could change, in case of future communications that would imply that it is a result of a reorganization of the company that would make, from a legal point of view, that it’s not to be regarded as a mere stock split, but as a dividend subject to withholding tax.
So regardless of the wording of the SEC filing, it's clear being seen as a stock split, so no withholding tax will be levied.
I also asked the question to my accountant and he replied that it was "tax neutral" - not sure how much he looked into it mind, rather he just assumed it was a standard split.
No capital gains - and no tax on accounts above €500k any more other, that was abandoned.
But dividends are taxed 25%
TBH we should just be happy no capital gains, if I were in Denmark I believe it's 55% - and that will be a lot of money by the time I cash-out.
Google was different because they issued different type of shares, Tesla it's just a split, but with "funny" wording due to the legalise in their registered state of Delaware.
So don't use that as a basis for comparison.
Hello. I am new member here from germany. I signed up because of the tax uncertainty for germans and I have no idea what to do.
My Tesla stock is at ING-Diba bank in germany.
I would be thankful if anyone could send me the text, that I could send to my contact person at this bank to get a reply.
Hopefully one or some of you could post your strategy what to do before 21st of August. (Taking the risk or not)
My knowledge ist rather smal regarding the stock market, but I am heavily invested (thankfully) in Tesla and I have no other option as to, more or less, do what others do who are much more knowledgeable then me in this regards.
Thanks a lot.
My Tesla stock is at ING-Diba bank in germany.
I would be thankful if anyone could send me the text, that I could send to my contact person at this bank to get a reply.
Hopefully one or some of you could post your strategy what to do before 21st of August. (Taking the risk or not)
My knowledge ist rather smal regarding the stock market, but I am heavily invested (thankfully) in Tesla and I have no other option as to, more or less, do what others do who are much more knowledgeable then me in this regards.
Thanks a lot.
I am German as well and recommend you to read all posts from the last days which should give you a head start.
Travelling today and therefore in a nutshell, we do not have any information yet how the Tax Authorities in Germany will decide.
I would not do anything right now and I will not sell unless I am forced to because in my case it does not put me in a better position AFAIK.
Head of IR TESLA Martin Viecha told me twice he and his team looked at it from all angels and it’s not a taxable event.
Thank you for your quick reply.
I would appreciate, if you could explain why you think that "not selling" does not put you in a better position.
It is not that I don't believe you I just want to understand the reason for this.
If it is a taxable event and we don't sell, what does then happen?
I don't have enough cash around to pay the tax. The only possibilty to pay the tax for me is to sell a bunch of shares...
smorgasbord
Active Member
Take a look at this post of mine in the main thread.
If I'm correct, then the dividend consists of 4 additional shares worth $0.001 USD each per share already owned. Even if they're taxing you on owned value, the sum of the 5 new shares is not different than 1 old share.
My view of the text in the SEC filing is that this like a whole bunch of people buying slices of a really gigantic pizza that's not going to get eaten. At some point the pizza maker decides that instead of 150 million slices, he'll re-cut the same pizza into 750 million slices. That makes everyone's slice smaller, but the maker is giving each slice owner 4 additional slices so each owner owns the same amount of pizza that they owned before the re-cut.
If some government decides to tax people on the act of cutting or the electronic distribution of slice certificates or some such thing, such this could be taxable. But, if they tax on sell transactions or even the value of your holdings, this should be a non-taxable/low-taxable event.
If I'm correct, then the dividend consists of 4 additional shares worth $0.001 USD each per share already owned. Even if they're taxing you on owned value, the sum of the 5 new shares is not different than 1 old share.
My view of the text in the SEC filing is that this like a whole bunch of people buying slices of a really gigantic pizza that's not going to get eaten. At some point the pizza maker decides that instead of 150 million slices, he'll re-cut the same pizza into 750 million slices. That makes everyone's slice smaller, but the maker is giving each slice owner 4 additional slices so each owner owns the same amount of pizza that they owned before the re-cut.
If some government decides to tax people on the act of cutting or the electronic distribution of slice certificates or some such thing, such this could be taxable. But, if they tax on sell transactions or even the value of your holdings, this should be a non-taxable/low-taxable event.
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