Curiosity in the taxation of US dividends

[Jean@Louis]

Good morning,

 

I hold PM shares in secondary listing on the Swiss market. While the withholding tax is 30% on the dividend amount for all US-listed shares, for my PM shares (dividend = 0.94 USD/share) the withholding tax is only applied to a part of the dividend amount:

Income Statement 1: GROSS INCOME USD 0.0564; TAX 30 %
Income Statement 2: GROSS INCOME USD 0.8836; (No withholding)

Can anyone tell me if they have seen this situation before?

Does PM pay part of the dividend from its reserves (I couldn't find any information on this)?

Or is this a normal situation for dividends from US securities listed secondary on the Swiss stock exchange?

 

Thank you in advance for sharing your experiences on this topic.

 

Jean-Louis

 

 

[Jerome]

Hi Jean-Louis

I have been eyeing PM for quite some time and will probably place an order soon, normally in NY. Unless someone confirms that the secondary listing on the Swiss stock exchange is more favorable. This situation is surprising I must say.

[birdienumnum]

Good morning,

 

I hold PM directly on the NYSE and I confirm the somewhat special treatment of the dividend, that is to say that a large part of the dividend is not subject to any withholding tax.

This is because the head office is located in Switzerland and not in the USA. The same is true for all those American companies that have moved their head office to Ireland in recent years (for example Eaton Inc which became Eaton plc). There are also American insurance companies that have their head office in Bermuda such as Montpelier Re Holding (MRH). Here too the dividend is special.

Birdie

[Jerome]

EH EH, thanks Birdie for this good news. This motivates me even more to buy PM, especially since it has fallen significantly recently.

[birdienumnum]

Indeed, with the drop in PM in recent days my finger is starting to twitch, in other words is about to pull the trigger..

 

Another interesting value in the same register: UVV (Universal Corporation). It is not about the movie studios but about the largest tobacco producer/planter in the world. Its clients are of course PM, British Tobacco, JTI, etc.

This is a value further upstream than the cigarette companies, little known to the general public. Dividends have increased every year for decades. The increase is always very modest (2% this year if I am not mistaken) that is why I consider this value as a bond but whose coupon increases with inflation. In any case, it is in the portfolio fund as far as I am concerned.

I say "not bad"!

[Jerome]

Yes, it is also a value that I follow in my strategy Smoking & Drinking Dividends. Great value indeed!

If the correction continues, we will finally have a little more choice again. 

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