withholding tax


Also found in: Dictionary, Thesaurus, Legal, Acronyms, Wikipedia.

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 ?
Note that if the withholding agent did not withhold tax on FDAP income because it was exempt from withholding tax under a relevant income tax treaty, the withholding agent still must file Form 1042-S.
In order to provide relief to the industrial sector, the government has decided to increase the withholding tax on commercial consumers.
If anyone uses cash for making Demand Draft or Pay Order etc, the withholding tax would be applicable.
Chapters contained in this book include: Chapter 1: Introduction to withholding tax Chapter 2: An overview of withholding tax regimes Chapter 3: Contractual tax Chapter 4: Technology Chapter 5: Basic reclaims systems Chapter 6: Relief at source and treaty benefit systems Chapter 7: The US advanced RAS system Chapter 8: The Japanese system Chapter 9: The system in the Irish Republic Chapter 10: The future of withholding tax regimes Chapter 11: SWIFT messaging Chapter 12: Benchmarking
Aizawa said the panel decided not to change the schedule because the already weak stock market may come under even greater pressure if the withholding tax, which many investors want to retain, is abolished.
Most members of the subcommittee on financial affairs agreed in a meeting to abolish the withholding tax option next spring without mentioning exactly when, Masahiro Okuno, head of the subcommittee, told a news conference after the meeting.
The minister reiterated that the levy of withholding tax was only applicable to the non-filers and the business community should have a clear understanding of this fact.
An advice in this regard was sent to the President and the Ordinance on withholding tax, after approval of the President, would come into force on Saturday, July 11.
Similar withholding tax provisions, however, either do not apply in other jurisdictions or withholding waivers are readily granted and easily obtained.
The final regulations provide guidance for partnerships required to pay withholding tax under Sec.
The distribution is subject to a 25% Israeli withholding tax, except for those shareholders that prove that they are eligible for a full or partial exemption from such tax.
The IRS denied IES's foreign tax credits for the withholding tax, as well as the capital losses, arguing the transaction was a sham.