withholding tax

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Related to Withholding taxes: Federal Income Tax Withheld

Withholding tax

A tax levied by a country of source on income paid, usually on dividends remitted to the home country of the firm operating in a foreign country.

Payroll Tax

A tax in which an employer retains a certain percentage of an employee's wages or salary and gives it to the IRS or tax agency instead of the employee. This reduces or eliminates the possibility that the employee will spend his/her tax liability, and give the government cash flow to fund certain operations. See also: Withholding.

withholding tax

TAX deducted at source from INTEREST or DIVIDEND payments. Withholding taxes are often levied by a country upon interest and dividends paid by a domestic company to non-residents. It is a means of taxing cash flows from the company before such monies move out of their jurisdiction. Such taxes are levied in order to encourage investment at home and raise money for the government. Looked at more broadly from an international community perspective witholding taxes are harmful because they reduce the free flow of international investment and distort the geographical location of such investment. See DOUBLE TAXATION.

withholding tax

a TAX levied by a government on the income (profits, interest, etc.) earned on a foreign portfolio or direct investment by its citizens and companies. Such a tax is levied in order to encourage investment at home and to raise money for the government. Looked at more broadly from an international community perspective, a withholding tax is harmful because it reduces the free flow of international investment and distorts the geographical location of such investment. The EUROPEAN UNION is currently considering introducing a withholding tax, which the UK, as an important centre for the EUROBOND market and a substantial recipient of FOREIGN INVESTMENT, is opposing because of the adverse effect this will have on capital inflows.
References in periodicals archive ?
Hence, we urge the Standing Committee to recommend that the Department of Finance expeditiously negotiate and implement a new protocol with the United States that eliminates withholding taxes on all dividends and interest for payments to both related and unrelated parties.
Hence, we urge the Government to negotiate a new treaty with the United States that eliminates withholding taxes on all dividends and interest for payments to both related and unrelated parties.
The IRS and Congress have closely scrutinized such arrangements because of their perceived lack of economic substance outside of generating FTCs, especially when a taxpayer claims an FTC on withholding taxes on dividend income, but holds the underlying stock on which the dividend is paid for a relatively short period.
Thus, TEI urges the Standing Committee to recommend expeditious negotiation and implementation of a new provision in the Income Tax Convention with the United States eliminating withholding taxes on all dividends and interest for payments to both related and unrelated parties.
The elimination of withholding taxes on royalty income is effective for amounts paid or credited offer June 30, 2004, according to Article 31.
00 in cash, without interest and less any applicable withholding taxes.
Howe Institute, (8) have shown a strong link between the elimination of withholding taxes on dividends and interest and increased foreign direct investment.
Some states consider the payments as withholding taxes, while others treat them as estimated taxes.
Two principal items remaining in the review relate to the timing of the expense recognition of the Company's foreign source withholding taxes and the ten year amortization period for costs of internally developed patents.
Of the many recommendations made, TEI wishes to highlight three for the Standing Committee: (1) elimination of withholding taxes under Regulation 105; (2) the negotiation and adoption of a binding arbitration procedure in Canada's tax treaties; and (3) streamlining of the reporting for foreign affiliates.
The 50/50 practice is applicable not only for federal income taxes, but also for Swiss withholding taxes on profit distribution (and in some cases for cantonal/ communal income taxes as well).
Nortem stated in its 2005 Proxy Statement that it would allow individual shareholders who qualify for a reduced Dutch tax withholding rate to file the proper paperwork with Nortem to allow Nortem to reduce the amount of Dutch tax withheld from the final liquidating distribution to such individual shareholders, due to Nortem's initial estimate of the magnitude of the likely Dutch withholding taxes to its shareholders.