This information is for reference only and shall not be considered a substitute for the qualified opinion of a tax advisor. Pinnacle or any of its affiliates do not advise on tax matters.

The United States Government through its Internal Revenue Service (IRS)  issued withholding tax rules (Jan 1st, 2001) affecting all recipients of income or proceeds from US securities.

As a result Pinnacle is required to collect certain documentations from you as the recipient of that income. Please read the enclosed summary of the required documentation designed to assist you in completion of the appropriate forms.

Please note that effective January 1 st , 2001 all income or proceeds paid to you from US securities will be subject to either 30% withholding tax or 31% back up withholding tax unless the documentation described below is received.

ARE YOU A US Person OR Entity?  

You are required to send us a completed W-9 form. For Joint account please complete W-9 form for each account holder. 

If we do not receive the W-9 form, all income will be subject to 31% back up withholding.

ARE YOU A FOREIGN Person OR Entity?  IF SO:

1. Are you a Beneficial Owner?

If you are the economic owner of all the income which is paid to your account, and are required to account for all of the income in your tax return, you are considered the "beneficial owner" under US tax law. The term "beneficial owner" covers both individuals and business entities (e.g. corporation).

If you are the beneficial owner, please complete W-8BEN form accompanied by a copy of your picture identification documents (e.g. passport), corporations provide picture ID for the person officer signing the account documents on behalf of corporation; for Joint accounts please complete W-8BEN for each account holder.

In circumstances where the securities in question are held in connection with a US Trade or Business please complete W-8ECI form. US Tax ID# is required in those cases.

You are not required to complete any of the other forms. Pinnacle/Penson Financial will then apply the lower of the regular US rates or the tax treaty rates of your country of residence.

2. Are you an Intermediary?

If you receive the income in your account on behalf of someone else, you are considered an "intermediary" under US tax law. Unlike beneficial owners, intermediaries must pay the income which they receive from Pinnacle/ Penson Financial to other parties, who are themselves either the beneficial owners or other intermediaries. Typical examples of intermediaries include custodians, brokers, nominees, trustees, partnership, and other types of agents.

a. Are you a Qualified Intermediary ?

If you are a party to a withholding agreement with IRS please complete a W-8IMY form. While you are not required to disclose to us your non-US resident clients, in accordance with the regulations you are required to disclose your US non-exempt recipient clients. Therefore, please provide us with W-8IMY form for yourself along with all documentation pertaining to your US non-exempt clients. You should state your status as assuming or non-assuming IQ. If you are non sure of withholding status, the Acceptance letter received from the IRS will specify what kind of QI you are:

i. Are you an assuming QI?

If you are a Qualified Intermediary who has elected to become an assuming QI Pinnacle/Penson Financial withholds 0 and you assume the withholding responsibility in accordance with the terms of the Acceptance letter.

ii. Are you a non-assuming QI?

If you are a Qualified Intermediary who has elected to become a non-assuming QI we/Penson Financial will withhold the lower of regular US rate and rate according to a tax treaty and generate Form 1012-S for each of your clients. The form 1042-S will specify that we/Penson Financial do not know your clients.

b.            Are you a Non-qualified Intermediary?

If you are not a qualified intermediary, you are a non-qualified intermediary. You have to provide us with W-8IMY form for yourself and with forms W-8BEN accompanied by picture ID for each client of the company for whom you receive the income in your account. We/Penson will withhold the lower of regular US rate and rate according to a tax treaty and generate Form 1012-S for each of the clients.