Vanguard, BlackRock ETF Shuffle Lets Foreign Investors Duck US Tax
Vanguard and BlackRock are enabling foreign investors to avoid US dividend taxes by shuffling between nearly identical equity ETFs. By strategically switching between funds, foreign investors can sidestep the 30% withholding tax on dividends that US law typically imposes. This practice highlights a tax loophole being exploited by major financial institutions and their international clients.
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Vanguard, BlackRock ETF Shuffle Lets Foreign Investors Duck US Tax
Vanguard and BlackRock are enabling foreign investors to avoid the 30% US withholding tax on dividends by frequently switching between nearly identical equity ETFs. By strategically timing these fund exchanges to coincide with ex-dividend dates, investors can receive capital appreciation while sidestepping dividend taxation. This practice raises concerns about potential tax revenue loss and whether it exploits unintended loopholes in US tax law.
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