Are the interest payments of US bonds held by Luxembourg domiciled funds subject to tax withholding? I found this document which states
andGenerally, the 30 percent (or lower treaty rate) U.S.
withholding tax applies to interest paid or accrued to
a nonresident on a debt obligation issued by a U.S.
borrower. However, several exceptions to this rule
Certain U.S.-source interest income (portfolio interest)
is exempt from the 30 percent U.S. withholding tax.
Portfolio interest includes interest which is payable on
the following types of U.S. instruments:
Obligations issued after July 18, 1984, in registered
form, if the foreign investor provides the paying agent
with a signed statement certifying nonresident status
but I still wanted to confirm if this is correct. Mostly I wondered if this is a case where holding an Irish domiciled fund and a Luxembourg domiciled fund would be equivalent from an interest withholding perspective.Interest (including OID) received by
U.S. nonresidents on obligations of
the U.S. government (e.g., Treasury
bills, notes and bonds) which were
issued after July 18, 1984 (“portfolio
interest” obligations) is generally
exempt from U.S. withholding tax,
as long as a Form W-8BEN has been
provided to the payer.
Thanks in advance for the help.