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Dividend tax information


A dividend tax is a tax imposed by a jurisdiction on dividends paid by a corporation to its shareholders (stockholders). The primary tax liability is that of the shareholder, though a tax obligation may also be imposed on the corporation in the form of a withholding tax. In some cases the withholding tax may be the extent of the tax liability in relation to the dividend. A dividend tax is in addition to any tax imposed directly on the corporation on its profits. Some jurisdictions do not tax dividends.

To avoid a dividend tax being levied, a corporation may distribute surplus funds to shareholders by way of a share buy-back. These, however, are normally treated as capital gains, but may offer tax benefits when the tax rate on capital gains is lower than the tax rate on dividends. Another potential strategy is for a corporation not to distribute surplus funds to shareholders, who benefit from an increase in the value of their shareholding. These may also be subject to capital gain rules. Some private companies may transfer funds to controlling shareholders by way of loans, whether interest-bearing or not, instead of by way of a formal dividend, but many jurisdictions have rules that tax the practice as a dividend for tax purposes, called a “deemed dividend”.[1]

  1. ^ Australian Taxation Office, Deemed dividends from private companies

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subject to income tax, not dividends tax. Non-residents receiving those dividends are subject only to dividend tax. Foreign dividends earned by South African...

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shareholder's personal income tax rate, but a part of the tax is offset by a 10.5217% dividend tax credit (for 2017) to reflect the federal tax paid at the corporate...

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Dividend stripping

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amount of the dividend. This may be done either by an ordinary investor as an investment strategy, or by a company's owners or associates as a tax avoidance...

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must be respected regarding capital gains. Taxes are charged by the state over the transactions, dividends and capital gains on the stock market. However...

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of Taxation. He claimed that he was only using legal tax loopholes, where dividend income is taxed differently in various jurisdictions. Shah was extradited...

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corporation are taxed on dividends distributed by the corporation. Corporations may be subject to foreign income taxes, and may be granted a foreign tax credit...

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United Kingdom corporation tax

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Income trust

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dividend tax refunds. In numerous legally bound cases, a Dutch dispute settlement commission (KiFID) ruled against DEGIRO when it comes to dividend tax...

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Corporate tax in Canada

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earning investment income, specifically, in regards to their "Refundable Dividend Tax on Hand" (RDTOH) balance. Under these rules, corporations are no longer...

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Australian dividend imputation system

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usually have their dividends taxed as earned income. The corporate income tax rate is 20.0%. The corporate tax was fully paid as dividend tax before 2004, but...

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to pay around $30 in taxes. If it then distributes these profits to its owners as dividends, then the owners in turn pay taxes on this income, say $20...

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Interest and Dividend Tax Compliance Act of 1983

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Dividend policy is concerned with financial policies regarding paying cash dividend in the present or paying an increased dividend at a later stage. Whether...

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on employment income) Later, Schedule F (tax on United Kingdom dividend income) was added. Pitt's income tax was levied from 1799 to 1802, when it was...

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may be taxed first when earned by the corporation (corporation tax) and again when the profits are distributed to shareholders as a dividend or other...

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