If specific requirements are completed, there are some dividends that are exempt from tax withholding. But first, let’s step back and define dividends tax and explain how it’s computed.

Dividend withholding tax is applied at a specified rate to dividend distributions in the country in which the issuing organisation is domiciled. The corporation issuing the dividend has a duty to withhold the tax and pay it their local tax authorities.

The dividend may be excluded from dividends tax depending on the characteristics or status of the dividend receiver, or the party who receives the dividend.

The following categories of entities are excluded from paying dividends tax:

Exempt from Tax Withholding 1

Given that they complete the necessary papers and deliver them on time to the business that is paying the dividend, these sorts of companies may be exempt from tax withholding. If they don’t, they can try to get the dividend tax returned from the business that gave them the dividend if they fill out the necessary paperwork within the following three years of the dividend payment.

At Global Tax Recovery, we specialize in the recovery of dividend withholding tax. If you want to ensure that you are getting the most out of your investments. Get in touch today to find out how we can help you.