# Tax on RSUs



## psalil

Hi, I am new to the forum. I am so new that I haven't even relocated to HK, but am in the process of doing so.

I work for an American multinational. A significant part of my compensation is as RSUs (Restricted Stocks), which are listed on NASDAQ.

I am wondering is anyone can help me figure out, if the RSUs get taxed at the US tax rate or at the K tax rate?

Thanks


----------



## BBCWatcher

That's U.S. source income, so U.S. income tax will definitely apply. Hong Kong may also want a share, in which case either a tax treaty (if it exists) will decide which government gets what, or you'll have a Hong Kong (foreign) tax payment that can offset some of the U.S. tax.

If you're not a U.S. citizen, U.S. national, or U.S. permanent resident then you'll need to submit a W-8BEN form to the U.S. custodian of those RSUs. You'll then be subject to 30% withholding unless a tax treaty says otherwise. So the U.S. will get paid even before you do. If you are not subject to withholding you'll probably need to make an estimated tax payment in the quarter(s) when you withdraw to avoid interest and penalties.


----------



## psalil

Thanks BBCWatcher

Quick clarification. Currently, I'm in India, and the vested RSUs show up as income for me in India, and is taxed at Indian tax rate of 31%. Since they are showing up on Indian payroll as income earned, wouldn't they be treated the same way in HK?

I understand that since I am a US permanent resident, I'll need to offset the taxes paid in India against that I owe in the US (on my worldwide income) when I file my tax returns.

Thanks


----------



## BBCWatcher

OK, interesting. India deems the income as India-source income, evidently. If that's not true you can attempt to file a tax return in India to try to reclaim that tax, but let's assume they're correct.

Yes, as a U.S. permanent resident you'll file a U.S. tax return. You'll claim the Indian tax as a Foreign Tax Credit on that income. That'll probably wipe out the U.S. tax owed on that income. In fact it might do a bit better than that, and it might give you an excess Foreign Tax Credit to "spend" to offset future U.S. income tax.

I think you're a resident of Hong Kong, so you'll file a tax return there, too. Same thing, I presume: you'll report the income then report the foreign tax paid on that income.

Wow, what "fun" you've got there.


----------



## bombayblue

Hi,

I am a US citizen working in India. Significant portion of comp is RSUs. Any of you have any recommendations for a tax advisor on RSUs for expats. 

Thanks


----------

