Understanding the withholding tax rates for Dividends, Interest, Royalties and Fee for Technical Services is crucial for businesses and investors operating internationally. These rates can vary significantly from one country to another, impacting the net income and overall financial viability of cross-border transactions. In this article, we will analyze the withholding tax rates in various countries for different types of income.
Countrywise Withholding tax rates / Chart below showcases the withholding tax rates for dividends, interest, royalties, and fees for technical services in numerous countries. These rates depend on various factors such as the recipient’s ownership percentage, type of payment, and specific agreements between countries.
For dividends, several nations offer reduced tax rates if the recipient company holds a certain percentage of shares in the paying company. Similar discounts apply to interest income in certain cases. Additionally, the tax treatment for royalties and fees for technical services can be more complex, with varying rates based on the nature of the payment.
It’s important to note that some countries have exemptions, especially for dividends and interest earned by specific entities like the government or central banks.
Navigating through the global landscape of withholding tax rates can be challenging, but it is essential for businesses and investors engaged in cross-border transactions. By understanding the tax rates in different countries and considering specific provisions and exemptions, companies can optimize their financial planning and ensure compliance with relevant tax laws. Considering applicable Double Taxation Avoidance Agreements can also help in making informed decisions and minimizing tax burdens on international earnings.
A person responsible for making payment to non-resident or foreign company is required to withhold tax. Tax is deductible at the rates prescribed under the Act or under the relevant DTAA, whichever is more beneficial for non-resident. This write up provides all such rates as prescribed under various Double Taxation Avoidance Agreements entered into between Indian and various foreign countries.
| Country | Dividend | Interest | Royalty | Fee for Technical Services |
| Albania | 10% | 10%[Note1] | 10% | 10% |
| Armenia | 10% | 10% [Note1] | 10% | 10% |
| Australia | 15% | 15% | 10%/15% |