Withholding tax is a tax levied on passive income earned by an individual or corporation of one country within the jurisdiction of another country. This tax is withheld by the payer of the income (such as a bank or employer) and then remitted to the government of the country where the income was earned. Examples of passive income subject to withholding tax include dividends, interest, and royalties.

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Withholding Tax Is

Question 5

Multiple Choice

Withholding tax is:

A) a tax levied on passive income earned by an individual or corporation of one country within the jurisdiction of another country.
B) a direct tax on personal and corporate income.
C) an indirect national tax levied on the value added in the production of a good or service.
D) an indirect national tax levied on personal and corporate income.

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