Who bears withholding tax?

The payer withholds it from the gross payment and remits it; the recipient effectively bears it unless a treaty or exemption reduces the rate. This is informational only.

Can a treaty remove withholding tax entirely?

Sometimes — many treaties cut the rate, and some intra-group payments qualify for a full exemption. It depends on the specific countries and conditions.

Withholding Tax — Tax Deducted at the Source of a Payment

Withholding tax is tax deducted at source when certain payments cross a border — commonly dividends, interest, and royalties. The payer withholds a percentage and remits it to the authority before the recipient is paid.

What it is

Rather than taxing the recipient after the fact, the country where the payment originates collects tax up front by requiring the payer to withhold it.

Common cross-border cases

Dividends to a foreign parent, interest on intercompany loans, and royalties for licensed intellectual property are the payments most often subject to withholding.

Treaties and relief

Double-tax treaties frequently reduce or remove withholding, and some regimes exempt qualifying intra-group payments. The applicable rate depends on the countries and the treaty.

FAQ

Who bears withholding tax?: The payer withholds it from the gross payment and remits it; the recipient effectively bears it unless a treaty or exemption reduces the rate. This is informational only.
Can a treaty remove withholding tax entirely?: Sometimes — many treaties cut the rate, and some intra-group payments qualify for a full exemption. It depends on the specific countries and conditions.

By country

Calculators

Sources

OECD — OECD — economic and tax statistics (accessed 2026-05-14; reviewed 2026-05-18)
Covers: Comparable corporate tax, statutory rate, and economic indicators across member and partner economies.
Does not cover: Effective tax rates, deductions and incentives, local surtaxes, and personal residency rules.
Why it matters: Used as a cross-country baseline to sanity-check rates against primary tax-authority figures.
Review cadence: Annual, plus on major statutory changes.
PricewaterhouseCoopers — PwC Worldwide Tax Summaries (accessed 2026-05-15; reviewed 2026-05-18)
Covers: Corporate income tax, VAT, and dividend withholding rates across most covered jurisdictions.
Does not cover: Your specific effective rate, bespoke incentives, rulings, or transactions requiring professional advice.
Why it matters: Used to triangulate rates against primary tax-authority sources, not as the sole authority.
Review cadence: Updated by the publisher per tax year; re-checked each data review.

Informational only. This content is informational only and does not constitute tax, legal, accounting, or financial advice. Tax and compliance requirements can vary by jurisdiction, residency, business activity, ownership structure, and regulatory changes. See the methodology, disclaimer, terms, and sources.

Last updated: 2026-06-23