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.

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 ?
The withholding tax imposed on 'C' and 'D' category licences have increased from Rs5,000 to Rs50,000 per annum.
Finance Undersecretary Antonette Tionko, who recommended the approval of the new RR, said the withholding tax on the interest income on the refund of meter deposits paid to residential and general service customers whose monthly consumption exceeds 200 kilowatts per hour will be retained at 10 percent.
There are, however, other peculiarities in this final withholding tax approach that may be clarified further through the implementing rules and regulations (IRR).
The government imposed 0.6 percent withholding tax on banking transactions on withdrawal of more than Rs 50,000 in the budget for fiscal year 2016 which was reduced subsequently to 0.3 percent due to protests of traders.
What the ruling definitively establishes is that the PEACe bonds are not subject to the withholding tax. Equally important for the government to consider is that the 6-percent interest per annum will continue to accrue from October 19, 2011 until full payment of the withholding tax.
In a review petition, the government again requested to allow withholding tax on dividends as pass-through without any caps.
111-147), payments made to certain foreign persons may be subject to a 30% gross basis withholding tax. This tax applies to payments of FDAP income and to gross proceeds from the sale of securities that generate U.S.-source interest and dividend income.
Prior to the 2010-2011 budget, the withholding tax was collected along with the monthly electricity bills of commercial and industrial consumers in 12 categories based on the total amount of the bill.
The withholding tax on interest income of those foreigners from short-term bills, asset-based securities, bonds, and structured notes, for instance, will be cut to 15%, while that on salary income and retirement pay will be lowered to 18%.
The future implementation of the 3% withholding tax on most government contracts is authorized by section 511 of the Tax Increase Prevention and Reconciliation Act of 2005 (P.L.
Belgium, Luxembourg and Austria will apply a 15% withholding tax for the first three years (2005-2007), 20% over the next three years (2008-2010) and 35% after 2011.
A phone call to the Franchise Tax Board brought a solution to this dilemma: Two forms were required--Form 592, Nonresident Withholding Annual Return, and Form 592-B, Nonresident Withholding Tax Statement.