Mr. Zhou from Shanghai holds Tencent and HSBC in his Futu Hong Kong stock account, with annual dividends of approximately 80,000 HKD. In June, he discovered that 30% in taxes had been withheld. A friend who uses Interactive Brokers had only 10% withheld on the same dividends.

The difference lies in two forms: the ITIN (Individual Taxpayer Identification Number) and the W-8BEN. With the IRS set to significantly tighten tax identification requirements for nonresident investment accounts in 2026, this issue is becoming increasingly important. Today, I’ll explain it thoroughly using a logical framework.

01

Why was I deducted 30%?

An ITIN (Individual Taxpayer Identification Number) is a 9-digit tax identification number issued by the U.S. Internal Revenue Service (IRS) to individuals who do not have an SSN but need to file U.S. tax returns. The format is 9XX-XX-XXXX. Form W-8BEN is the “Certificate of Non-U.S. Person Status,” used to declare your nonresident status to U.S. brokerage firms or banks so that you may benefit from the preferential tax rates under the U.S.-China tax treaty.

Without a W-8BEN form, dividend withholding is capped at 30%; with a valid W-8BEN form and in accordance with the China-Hong Kong tax treaty, the withholding rate can be reduced to 10%. A single form directly determines where one-third of your dividends go.

In 2026, the IRS issued Notice 2026-12, clarifying the tax identification requirements for non-U.S. residents holding U.S. securities accounts; domestic brokerage firms such as Interactive Brokers, Firstrade, and Charles Schwab now require non-residents opening accounts to provide an ITIN or Form W-8BEN.

02

The rules for Hong Kong stocks and U.S. stocks are different.

There are two channels for Hong Kong stocks: through the Stock Connect program, dividends are temporarily exempt from individual income tax (this policy extends through the end of 2027); Open an account directly with a local Hong Kong brokerage firm; dividends are subject to 10% withholding tax and must be included in the annual settlement of comprehensive income in mainland China to make up for the 20% shortfall; 10% taxes already paid may be credited in accordance with regulations.

U.S. Stocks: The U.S. exempts non-residents from capital gains tax, but withholding tax applies to dividends—if a W-8BEN form is filed, the withholding rate is 10% (under the U.S.-China Tax Treaty); otherwise, it is 30%. Note that although Chinese ADRs (such as Alibaba, JD.com, and Pinduoduo) are listed on U.S. stock exchanges, their dividends are also subject to these withholding rules.

Under the CRS (Common Reporting Standard), U.S. brokerage firms report account data to the IRS, ensuring a high degree of transparency. The old approach of “no one will know if you don’t report it” has essentially been shut down. Accurate reporting is the only correct course of action.

If you’re facing a similar situation—you have a U.S. or Hong Kong stock account, your dividends are being withheld under 30%, or you’re unsure whether to apply for an ITIN—feel free to scan the QR code to contact Qicaiying’s online customer service (WeChat/Phone: 18620388671). We’ll help you review your W-8BEN form field by field to ensure it’s approved on the first try. Feel free to scan the QR code to contact Qicaiying’s online customer service (WeChat/Phone: 18620388671), and we’ll help you sort out this entire process from start to finish.

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03

People with 90% status actually do not need an ITIN.

Key Fact: The 90% applies only to retail investors in ordinary U.S. stocks. By signing a W-8BEN at no cost, you can enjoy the 10% preferential tax rate—there is absolutely no need to apply for an ITIN. Only three categories of people need to link an ITIN to a W-8BEN form: those receiving rental income from U.S. real estate, those opening a U.S. bank account that requires identity verification, and those eligible for preferential treatment under special agreements (such as international students).

Most domestic individuals can simply fill out Form W-8BEN using their ID number. Starting in 2026, some domestic brokerages will require non-residents to provide an ITIN or Form W-8BEN when opening an account, but ordinary retail investors can still open an account using Form W-8BEN (some brokerages limit this to cash accounts; those with an ITIN can open margin accounts).

So don’t be misled by marketing claims that you “must get an ITIN”—first confirm whether you fall under one of those 10% special circumstances. If you do, then apply; if not, you’ll save yourself the verification fee and the time.

04

Five Key Fields on Form W-8BEN

Line 1 Name: Enter your full name in English pinyin as it appears on your passport; do not use Chinese characters or nicknames. Line 2 Nationality: Enter “China” or “Hong Kong”; do not use alternative spellings. Line 3 Permanent Address: Enter your residential address in mainland China or Hong Kong; do not enter a U.S. address (otherwise, you will be deemed a U.S. tax resident).

Line 9a: If you have an ITIN, enter it; if not, check the “ITIN not required” box and provide a reason. Line 10: Check the box for tax treaty benefits, and enter 10% as the tax rate (the preferential withholding tax rate for dividends under the China-Hong Kong tax treaty).

The W-8BEN form must be re-signed every three years; the brokerage firm will send an email reminder when it is due. If you forget to renew it, the preferential tax rate will automatically expire and revert to 30%. Be sure to keep your Form 1042-S (U.S. tax payment certificate) on file; you can claim a tax credit when filing your annual individual income tax return in China. Without this certificate, you will not be able to claim the credit.

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05

How to Lower Taxes

First, when opening an account, fill out Form W-8BEN correctly: select “China” for tax residency and check “10%” for treaty benefits; ensure your name and address match those on your passport, otherwise the form will be invalid and withholding will still be applied under “30%.” Second, keep your Form 1042-S tax payment certificate, as it can be used for tax credits during your annual tax settlement in China.

Third, when investing in Hong Kong stocks, prioritize using the Stock Connect program to avoid omissions in your tax filing that might occur if you open an account directly; for U.S. stocks, be sure to submit Form W-8BEN. Fourth, only apply for an ITIN if you are receiving long-term dividend income and are in a special situation (such as rental income from real estate or opening a U.S. credit card)—don’t blindly follow the trend.

In a nutshell: The bottom line for U.S. stock dividend taxes in 2026 is “W-8BEN is mandatory, and an ITIN is required on a case-by-case basis.” If you fill out the form correctly, the withholding tax on dividends will be reduced from 30% to 10%—a significant difference that adds up over the long term.

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