Tax Management International Forum discusses the definition and taxation of dividends

The Tax Management International Forum convened in Paris on Apr 20, 2007, under the chairmanship of Leonard Silverstein of Buchanan Ingersoll & Rooney PC, Washington, DC, to discuss the nature of dividends under the income tax laws of the countries represented at the meeting and how dividends are ta... Full description

The Tax Management International Forum convened in Paris on Apr 20, 2007, under the chairmanship of Leonard Silverstein of Buchanan Ingersoll & Rooney PC, Washington, DC, to discuss the nature of dividends under the income tax laws of the countries represented at the meeting and how dividends are taxed under those laws. The more familiar US/European divide emerged when the discussion turned to the fundamental question of what constitutes a dividend for tax purposes. In general, Chinese resident individual shareholders are currently taxable at the rate of 20% on dividends received from both Chinese and non-Chinese enterprises. In the UK, the income tax concept of a dividend is not linked to profits at all. Indeed, under the relevant provision, UK income tax is charged not only on dividends but also on "other distributions." Unlike Germany and Spain, Italy does have a definition of a dividend for tax purposes.