I see many holding companies paying dividend are subject to withholding tax, say 30% for a US LLC.
Who hold the money and for how long?
Who hold the money and for how long?
how does withholding tax works ?
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But what if you don't have to pay tax?
Say I own a US LLC or a SWISS AG as discussed lately a few times here. Both countries have applied withholding tax, say they want to hold 30% will I have to pay 30% of my turnover (which I don't may have in my bank account) to the tax authorities even if I don't have to pay tax because I did not made profits?
Say I own a US LLC or a SWISS AG as discussed lately a few times here. Both countries have applied withholding tax, say they want to hold 30% will I have to pay 30% of my turnover (which I don't may have in my bank account) to the tax authorities even if I don't have to pay tax because I did not made profits?
If you keep money inside the company there are no withholding taxes to pay. You pay corporate income taxes on your profits.
Withholding taxes are paid only when you pay yourself or a foreign company meaning when there are money that are leaving the company.
A Swiss AG for example has 35% withholding taxes on dividends.
If those are paid to Swiss residents are generally refunded while if those are paid to a foreign company there are double tax treaties that regulate how much taxes Swiss company has to withhold.
For example if Swiss AG has to pay dividends to a company in a country that has a double tax treaty with Switzerland the withholding tax could be reduced to zero.
Last edited: May 17, 2022
Withholding taxes are paid only when you pay yourself or a foreign company meaning when there are money that are leaving the company.
A Swiss AG for example has 35% withholding taxes on dividends.
If those are paid to Swiss residents are generally refunded while if those are paid to a foreign company there are double tax treaties that regulate how much taxes Swiss company has to withhold.
For example if Swiss AG has to pay dividends to a company in a country that has a double tax treaty with Switzerland the withholding tax could be reduced to zero.
Last edited: May 17, 2022
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