We know tax can be complicated and stressful, but here’s a breakdown of how tax works with your Wise account.
Wise is required to follow local tax laws in every country we operate in. That means in some countries we might be required to:
withhold on currency transfers,
give customers an invoice for their remittance,
report customer data to the local tax authorities.
We try to be as transparent as possible about any tax we're required to withhold, and any information of yours we're required to report, however we're not authorised to provide you with any tax advice.
What information do you report to tax authorities?
The answer to this changes based on which country you’re in. Certain Wise entities must comply with the global anti-tax evasion regimes, FATCA and CRS, due to the type of products they offer.
For example, our newest product, Assets, causes a subsidiary of Wise, TINV Ltd., which provides the Assets product to fall within the scope of FATCA and CRS as a Custodial Institution. Customers that participate in Assets who are deemed to be reportable persons will be reported to HMRC in line with the Automatic Exchange of Information.
Wise Australia Pty Ltd, another subsidiary of Wise, is also subject to FATCA and CRS due to the Authorised deposit-taking institution (ADI) licence it holds.
Wise is working directly with the Electronic Money Association (EMA) and the Organisation for Economic Co-operation (OECD) to ensure our processes and products combat any tax evasion. As and when Wise is obligated to collect and report customer tax and financial information to tax authorities we will do so.
In addition to tax requirements, other regulations may require Wise to collect certain data, like transactions over a certain threshold, and report it to regulatory bodies. Our Terms and Conditions of each entity provide more information about the what we may need to report to different tax authorities.
Who do I have to report my taxes to?
Customers are required to disclose and pay any necessary taxes associated with transfers made through our systems, or on cash received into their Wise Account.
The triggering of a tax liability and/or reporting obligation will depend on your tax residency, the nature of the income, and potentially the amount. We recommend you seek tax advice if you're unclear on the tax implications of a specific transaction.
Does Wise charge any taxes?
Wise may have to levy tax on its transfer fee according to local tax laws. For example Brazilian real (BRL) transactions where IOF (Imposto sobre Operações Financeiras — financial operations tax) may be imposed. Where transactional taxes apply, these will either be included in the fee payable or shown separately at the time of payment, and won’t impact the amount sent to the recipient.
Wise will pay out the agreed amount to the recipient and, if required to withhold any taxes, will disclose any taxes that will apply. Depending on the nature of a transfer, you or the recipient may need to declare and pay tax. Wise can’t advise whether tax applies to your transfer and we recommend that you ask a financial advisor and/or the relevant tax authority
How does having a Wise Account impact my taxes?
The features and functionality of the Wise Account product vary across jurisdictions, which could impact the taxes you may need to pay. Please consult a tax advisor if you are unsure of your tax payment or filing obligations.
If you earn any interest while holding money with Wise you may need to pay tax on the annual interest earned in accordance with the laws and regulations where you are a tax resident. Additionally, if you receive any taxable payments (salary or otherwise) into your Wise Account from a 3rd party, that will also be taxed in accordance with the laws and regulations where you are a resident for tax purposes.
Wise is typically not a withholding agent in most jurisdictions, so if you believe you should be paying taxes on income you receive into your Wise Account, please consult a tax advisor. The exception to this is if you are a customer of Wise Europe and receive balance cashback on your account. Wise will withhold 30% of any cashback you earn.
If you hold your money in Assets with Wise, you may earn taxable and/or reportable income, which you will be responsible for paying taxes on in accordance with the local laws and regulators in your tax jurisdiction(s). We recommend that you consult a tax advisor if you need assistance calculating any proceeds or gains on your investment. Wise provides our Assets customers with a comprehensive proceeds statement associated with their trading activity with Wise but we cannot provide further tax advice.