1 · Domicile decides, not the exchange
This trips up a lot of investors: a stock can trade on the New York Stock Exchange and still be taxed under the rules of a completely different country. Withholding tax is levied by the country where the company is legally domiciled (incorporated), not where you bought the share. The quickest way to read the domicile is the ISIN country prefix: US = United States, GB = United Kingdom, NO = Norway, MH = Marshall Islands, BM = Bermuda, CA = Canada, AU = Australia, ZA = South Africa, BE = Belgium.
That single fact is why hard-asset dividends can be so tax-efficient: much of the shipping sector is incorporated in Marshall Islands or Bermuda, which don't withhold anything.
2 · The withholding-tax map
Rates below are the statutory withholding tax on dividends and the reduced rate a US investor can typically claim under the relevant tax treaty. Sources: PwC Worldwide Tax Summaries and each country's tax authority (verified July 2026). Treaty rates require the correct paperwork (see below).
| Domicile | Statutory | US-treaty rate | Typical hard-asset names |
|---|---|---|---|
| Marshall Islands | 0% | 0% | Dorian LPG, DHT, Int'l Seaways, Star Bulk |
| Bermuda | 0% | 0% | FLEX LNG |
| United Kingdom | 0% | 0% | TORM |
| Norway | 25% | 15% | Vår Energi, Aker BP, Equinor, DNO |
| Canada | 25% | 15% | Enbridge, TC Energy, Pembina (pipelines) |
| Australia | 30% unfranked | 0% franked | BHP, Fortescue, Whitehaven (mining) |
| South Africa | 20% | treaty-reduced | Thungela, coal & miners |
| Belgium | 30% | ~15% | CMB.Tech |
The takeaway: the tanker and dry-bulk core (Marshall Islands, Bermuda, UK) is essentially withholding-free at source. The tax you meet is on the Norwegian, Canadian, Australian and South-African names — and even there, the treaty rate is 15% or, for franked Australian dividends, zero.
3 · How W-8BEN and treaties cut the bill
Where a country does withhold, you usually don't pay the full statutory rate — provided you file the right form. For US investors that form is the W-8BEN (Certificate of Foreign Status), which you lodge with your broker. It tells the paying country "I'm a US resident, apply the treaty rate." In Norway and Canada that drops the deduction from 25% to 15%; some countries also want a local declaration (Canada's NR301, for example).
- File it once, up front. A valid W-8BEN generally applies the reduced rate at source, so you never overpay in the first place. It typically needs renewing every few years.
- Franking is automatic. Australian franked dividends need no form — the 0% follows from the company already having paid corporate tax.
- Zero-withholding domiciles need nothing. Marshall Islands, Bermuda and UK names pay you the full dividend regardless.
4 · The foreign tax credit — avoiding double tax
Here's the part that matters for your total return: even after foreign withholding, you still owe US tax on the dividend at home. Without relief you'd be taxed twice. The foreign tax credit generally lets you offset the foreign tax already withheld against your US tax bill, so the same income isn't taxed twice. The details — credit vs. deduction, holding-period rules, account type (a credit is often unavailable inside a US retirement account) — depend on your situation.
My practical rule: I let the tax map inform where a name sits in the portfolio, never whether a business is good. A great cashflow machine with a 15% withholding is still a great cashflow machine. I screen the dividend on InvestingPro first; the tax handling is a second-order question. (*Affiliate link — no extra cost to you.)
This is general information, not tax advice. Withholding, treaty eligibility and credits depend on your residency, account type and the year's rules — confirm your own case with a qualified tax professional before acting.
5 · FAQ
What sets the withholding tax rate on a foreign dividend?
The company's legal domicile, not the exchange. An NYSE-listed, Marshall-Islands-domiciled stock withholds 0%; a Norway-domiciled one withholds 25% (15% for US investors under treaty). Read the domicile from the ISIN country prefix.
Which hard-asset domiciles withhold 0%?
Marshall Islands and Bermuda levy no dividend withholding, and the UK charges 0% on ordinary dividends to non-residents. Much of the shipping sector sits in these jurisdictions.
How does a US investor reduce foreign withholding tax?
File a W-8BEN with your broker to claim the reduced treaty rate (e.g. 15% instead of 25% in Norway or Canada), and claim the US foreign tax credit for tax still withheld. Confirm the mechanics with a professional.
Do franked Australian dividends have withholding tax?
Fully franked dividends carry 0% withholding for non-residents; unfranked dividends are withheld at 30% (15% for US investors under the US-Australia treaty). Franking status is the key variable for Australian miners.