When you open your Wealth account in DolarApp, it’s important to understand the associated tax implications. Below, we explain the key aspects to keep in mind.
W-8BEN form to certify foreign status
As a non-U.S. investor, when you open your investment account, you sign the W-8BEN form. This document, issued by the U.S. Internal Revenue Service (IRS), certifies that you are not a U.S. tax resident and allows a reduced withholding tax rate to be applied on U.S.-source income, such as dividends, according to the tax treaties in force between the U.S. and your country of residence.
The form is valid for three years and must be updated if your tax situation changes.
Automatic information exchange with the U.S.
The United States has automatic financial information exchange agreements with several Latin American countries, including Mexico, Argentina, Brazil, and Colombia (subject to current agreements with each country). These agreements, under the FATCA law, allow the IRS to share information about financial accounts held by local residents with their corresponding tax authorities.
This means that although DolarApp does not directly report your investments to local governments, the U.S. broker may share that information with the IRS, which may in turn transmit it to your country if a bilateral agreement is in place.
Tax report provided by DolarApp
Each year, DolarApp provides you with a report containing the information you need to declare your investments to your local tax authority. This report is made available in February and includes relevant movements and balances from your account. To view and download your tax report in the app:
Go to the ‘Wealth’ tab
Tap the ‘Settings’ button in the top right corner
Select the ‘Tax documents’ option
Choose the year you want to review
Download the report for that year
This report is useful for filing your annual tax returns if your country requires you to declare foreign investments.
Important note
DolarApp does not provide personalized tax advice. For further information about your tax obligations or how to properly report your investments, we recommend consulting with a tax professional in your country.