Withholding treaty

Withholding treaty — a bilateral agreement setting how much tax one country withholds from income paid to the other’s residents. The US–PH treaty puts US dividend withholding at 25% for a Filipino with a W-8BEN on file (30% without). The US–Ireland treaty is 15% — the rate Ireland-domiciled funds pay internally, which is the arithmetic heart of the UCITS advantage.

First used in: 1.6 · Cross-border plumbing