Dividend Withholding Tax
Foreign dividends are generally subject to withholding tax and governments apply an estimated $3.7 billion withholding tax to overseas securities each year. It is standard practice for the country of issue to apply a withholding tax to the portfolio income of non-resident investors. Most investors are unaware that foreign withholding tax can be reclaimed in full or at least in part. If you've never filed a reclaim, the amount at stake could be substantial.
Countries regularly enter into bilateral agreements called income tax treaties. Withholding tax reclaims arise because the rate permitted under the terms of the treaty is less than the default rate applied by most foreign governments. In most cases the only way to obtain your legal entitlement is to file a reclaim.
The calculator below allows you to calculate how much you may be due back if you received dividends from foreign shares. Just enter the country from which the dividend was paid, the country in which you reside and the gross amount of your dividend for an instant refund calculation. The taxback.com withholding tax service is suitable for both individual investors and financial service professionals.