Dec 142016
As the year draws to a close, corporations begin to account for earnings from all sources during the year, both from the active pursuit of business and passive investments. One such form of income that should not be overlooked is dividends.
The applicable tax on dividends depends on the type of recipient. The Tax Code exempts from tax dividends received by domestic corporations and resident foreign corporations from domestic corporations, while those received by non-resident foreign corporations are generally subject to a 30% final withholding tax, which may be reduced pursuant to applicable treaty and tax sparing provisions.