Withholding taxes on capital gains

Gemini said: "I'm Canadian by nationality, but I am a non-resident, as I am a resident of Japan. But I don't really understand how taxes will work... As a non-resident of Canada, I don't owe the Canadian gov't anything on my income. As a resident of Japan, I owe the Japanese gov't taxes on my world income. However, as a non-res of Canada, if I get any income from a CDN source, I think I have to pay withholding taxes of about 25%. I've also heard the same about the US. Now, what exactly is the source? Is the broker the source, or is it the company whose stock I bought? I think it's the company, where it's registered, but I'm not 100% sure. So, assuming this is correct, if I buy shares in a CDN company, the broker I use is irrelevant, whether it be a broker in Japan, Canada or the US. The bottom line is, I'll pay taxes to the CDN gov't when I sell. Same thing for US stocks, right? (I thinkt the withholding tax is about 30% though, right?) So, it doesn't matter which broker I use, does it? The only thing that matters is where the company is registered, and it is to that country that I'll pay taxes, right? However, if I invest in Microsoft, say, I'll pay taxes to the US gov't of 30%. But do I have to pay additional taxes to the Japanese gov't? Also, when are withholding taxes actually taken? Are they taken immediately as I sell the shares? Or are they calculated at the end of the fiscal year and taken then? What if I profit $50,000 on my first sale. If they take it then, what happens if I lose $50,000 on my next batch of trades? Do they give it back? Or is it "withheld" until the end of the year and then settled based on acutal earnings? Problem is, if it's withheld as I go, I have a lot less capital to play with than normal, right? Does anyone know the answers to these questions? Any help would be greatly appreciated. Thanks!"

BenHouston said: "Let me be the first to say I have noooooooooooo idea...."

thezster said: "[QUOTE=Gemini]I'm Canadian by nationality, but I am a non-resident, as I am a resident of Japan. But I don't really understand how taxes will work... As a non-resident of Canada, I don't owe the Canadian gov't anything on my income. As a resident of Japan, I owe the Japanese gov't taxes on my world income. However, as a non-res of Canada, if I get any income from a CDN source, I think I have to pay withholding taxes of about 25%. I've also heard the same about the US. Now, what exactly is the source? Is the broker the source, or is it the company whose stock I bought? I think it's the company, where it's registered, but I'm not 100% sure. So, assuming this is correct, if I buy shares in a CDN company, the broker I use is irrelevant, whether it be a broker in Japan, Canada or the US. The bottom line is, I'll pay taxes to the CDN gov't when I sell. Same thing for US stocks, right? (I thinkt the withholding tax is about 30% though, right?) So, it doesn't matter which broker I use, does it? The only thing that matters is where the company is registered, and it is to that country that I'll pay taxes, right? However, if I invest in Microsoft, say, I'll pay taxes to the US gov't of 30%. But do I have to pay additional taxes to the Japanese gov't? Also, when are withholding taxes actually taken? Are they taken immediately as I sell the shares? Or are they calculated at the end of the fiscal year and taken then? What if I profit $50,000 on my first sale. If they take it then, what happens if I lose $50,000 on my next batch of trades? Do they give it back? Or is it "withheld" until the end of the year and then settled based on acutal earnings? Problem is, if it's withheld as I go, I have a lot less capital to play with than normal, right? Does anyone know the answers to these questions? Any help would be greatly appreciated. Thanks![/QUOTE] Your broker withholds zero tax dollars. That is your responsibility at the end of the tax year. Keep detailed and accurate records. Your net loss/gain is what you are taxed on."