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 ?
After December 2012, the business and industrial community was also penalized with a series of controversial SROs introducing large scale changes in taxation structures and enhancing the rates of Sales Tax, With-Holding Tax. The FBR has given a free hand to the Officers of Inland Revenue to manually select cases for audit, issue demands and take actions against registered persons under various pretexts to generate more revenue to meet the targets for current financial year, which had already created havoc for the business and industrial community.
It would help promote the construction industry and the associated industries-the duty on tyre and scrap has been cut to half at 10 percent from 20 percent-the limit of with-holding tax on withdrawal of cash from a bank has been doubled to Rs 50,000 from Rs 25,000-- the Export Development Fund has been enhanced to Rs ten billion.
iii) Contractors/sub-contractors for designing, supply of plant and equipment and construction of power project will be subject to with-holding tax [at] 4% of gross receipts which will be the final discharge of income tax holiday.
In its proposals for national budget 2012-2013 sent to FBR, the premier chamber of Pakistan said that high rates of Customs Duty, Sales Tax and With-Holding Tax on import of raw materials, intermediate and finished goods must be brought down to curb smuggling and illegal imports under the guise of Afghan Transit Trade.
The tax regime not only applied tax on income but all the other taxes like Turn Over Tax of half per cent and With-holding Tax of 2.5 per cent were also applicable to the Modaraba transactions.
Similarly, with-holding tax of 30 per cent on services provided by non-resident contractors is also to be reduced to 3 per cent as applicable to resident contractors and it shall be treated as final settlement of tax liability.
Introduction of capital value tax (CVT) and increase in the spread of with-holding tax net (CVT) and increase in the spread of with-holding tax net did constitute measures to broaden the direct tax base and hit at the right sections of the population, however, their impact was marginal and much more remains to be done.