eToro to Implement a Tax Calculating System Enabling Traders to Keep More of Their Cash Dividends

eToro, the world's leading social investment platform, announced yesterday the implementation of a tax calculating system which will allow its users to keep more of their cash dividends.

"As investors, we all know how exciting it is to make a profit on investments. And we all know how frustrating it is to see a high percentage of these profits go to taxes," the broker explained.

And the firm clarified that currently, when non-US residents invest in US stocks, eToro is required to withhold 30% of their dividends and pay it to the US Internal Revenue Service (IRS) on their behalf.

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"However, if your country has a tax treaty with the US, we can withhold less of your cash dividends for taxes, meaning that you receive more money. The amount withheld differs per country and is subject to change based on that country's tax agreement with the US," said the firm.

The firm added that the IRS requires non-US citizens to pay taxes on dividends they receive from US-based companies. eToro is required by the IRS to pay those taxes, as opposed to the IRS going out and collecting it from non-US citizens, as the brokerage provides clients with access to invest in US stocks.

Last week, Fazzaco reported that eToro has increased the maximum​ amount of $LUNC that users can hold, from $5,000 to $20,000. The amount per position has been increased from $1,000 to $2,500.