Withholding tax: what Interactive Brokers, DEGIRO and Trade Republic actually do
Three verified tax mechanisms, sourced from each broker's own official documentation: Interactive Brokers' street-name custody, DEGIRO's residency condition, Trade Republic's qualified-intermediary status — and how to check your own.
Data reviewed on 8 min read
"My broker handles this really well" and "my broker handles none of this" can both be true at once, for two different brokers, on the same topic. How your dividends are taxed isn't a matter of luck: it's a direct consequence of structural choices each broker made — sometimes publicly documented. Here are three verified mechanisms at three brokers used by French residents, and how to check your own if it isn't listed.
Interactive Brokers: "street name" custody on your French shares
Interactive Brokers holds client securities "in street name" through its US entity, Interactive Brokers LLC — including French shares. Documented consequence: on a French dividend (LVMH, Total, Sanofi…), the French administration applies the withholding owed by a non-resident corporate shareholder, not the regime of an individual French resident. We verified this mechanism in detail, with the actually observed rate and how to recover it: the full breakdown.
DEGIRO: US relief at source exists, with conditions
DEGIRO offers, in the account's tax settings, a relief-at-source process for US dividends — a digital W-8BEN/W-8BEN-E. Mechanism documented by DEGIRO itself: this process requires that the country of residence, country of tax residence, and the bank account's country all match. A French resident with a bank account outside France could therefore see this relief denied, whereas a standard W-8BEN with another broker carries no such constraint. Renewal follows the same rule as everywhere else: every 3 years, or on a change of circumstances.
Trade Republic: an automatic reduction via qualified-intermediary status
Trade Republic (Trade Republic Bank GmbH, established in Germany) documents that its own "Qualified Intermediary" status with the US tax authorities lets it apply 15% withholding directly on clients' US dividends — instead of the full 30% rate — with no separate W-8BEN step required from the client. It's a concrete example of what this site elsewhere calls "the exception worth stating": some brokers correctly apply the right rate at source, for free.
Summary table
| Broker | US withholding reduced automatically? | French shares: custody | Established in France? |
|---|---|---|---|
| Interactive Brokers | Yes, via W-8BEN | "Street name" through a US entity — French non-resident-entity withholding possible | No |
| DEGIRO | Yes, if residence/tax residence/bank account all match | Not verified in this article — check with the broker | No |
| Trade Republic | Yes, automatically (Qualified Intermediary status) | Not verified in this article — check with the broker | No |
| Your broker | To check | To check | To check |
Your broker isn't in this table?
Rather than inventing a mechanism we haven't verified for your specific broker, we'd rather give you the exact questions to ask them — the same ones we recommend for any broker, with the answers to expect and what they mean: Withholding tax: what your broker won't tell you.
Your questions about broker tax handling
Is Interactive Brokers a bad broker because of street-name custody?
No — it's a common structural choice for brokers backed by a US entity, not a defect. The consequence on your French shares is real and verified, but it's fixable: it's a genuine over-withholding, recoverable via forms 5000/5001.
Should I switch brokers after reading this?
That's not what this article recommends: each mechanism listed has a counterpart (Interactive Brokers correctly applies the US W-8BEN, for instance). Switching brokers never catches up on the past — only a refund claim does.
How do I check the exact mechanism at my own broker?
Check the tax section of their help centre (often under "Tax", "Tax documents", or similar), and ask them directly the questions listed in our dedicated article. A precise, documented answer is the sign of a broker that has this under control.
Does FiscalPlace have a partnership with any of these brokers?
No. The facts cited here come exclusively from each broker's public documentation, with no commercial relationship or privileged access.
Whatever your broker, the simulator and the statement reader work the same way.