withholding tax

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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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

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.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
With a payroll withholding system in place, the parties would be eager to get citizens to sign up as members.
There is good reason to be careful, because when carriers are reclassified from independent contractors to employees, bad things happen to good papers: Suddenly, publishers have a new, big staff full of people eligible for benefits, who require payroll withholding for taxes and workman's compensation, who can sue the paper on a wide variety of employment issues and who open the newspaper to numerous other liabilities.
America's 156 million wage earners, and the payroll professionals that pay them, contribute, collect, report, and deposit approximately $1.4 trillion through the payroll withholding system, or 71% of the annual revenue of the U.S.
taxation system conveys a virtual liduciary responsibility on employers with respect to employee payroll withholdings. If employers, for whatever reason but to pay the amounts in the prescribed time the IRS seeks serious penalties for these responsible.
Employees' payroll withholdings (trust fund taxes) held for the exclusive use of the government have no time limits restricting their priority status.(14) This type of assessment, commonly termed the 100% penalty, for failing to withhold trust fund taxes is considered a tax rather than a penalty.