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 treaty paperwork cuts the bill
Where a country does withhold, you usually don't pay the full statutory rate — provided the right paperwork is on file. One clarification first, because it is the single most common mix-up: W-8BEN is not your form. The IRS instructions are explicit that a US citizen or other US person must not use it and should file Form W-9 instead — W-8BEN certifies foreign status. As a US investor you give your broker a W-9, and where a foreign payer wants proof of US residence for treaty relief, that proof is IRS Form 6166, requested with Form 8802. In Norway and Canada the treaty drops the deduction from 25% to 15%; some countries also want a local declaration (Canada's NR301, for example).
- Sort it out up front. Where relief is granted at source, you avoid overpaying in the first place. Where it is not — Norway, for instance, requires a current certificate of residence to sit with the payer or custodian — the full 25% comes off and you reclaim the difference afterwards.
- 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?
Not with a W-8BEN — the IRS states a US person must not use that form and should file Form W-9 instead. Give your broker a W-9; where a foreign payer wants proof of US residence for treaty relief, that is IRS Form 6166 (requested via Form 8802), and Canada additionally uses NR301. That gets you the treaty rate (e.g. 15% instead of 25% in Norway or Canada). For tax still withheld you can claim the US foreign tax credit — but only up to the treaty rate; anything withheld above it must be reclaimed from the source country, not credited on Form 1116. 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.