how does withholding tax works ?

#3
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?
 
Reactions: troubled soul
#5
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:
Reactions: Martin Everson and troubled soul
You must log in or register to reply here.

Similar threads

T
IBKR with Thai updated address
Replies
12
Views
684
Tax, Accounting, Licensing & Legal
Mimimel
M
C
Best set up for US withholding tax optimization
Replies
6
Views
671
Tax, Accounting, Licensing & Legal
mraleph
B2B withholding taxes on commission and consultancy fees
Replies
2
Views
529
Tax, Accounting, Licensing & Legal
Dubsize
A
Cyprus and royalty income
Replies
17
Views
1,163
Tax, Accounting, Licensing & Legal
Marzio
J
Reducing taxes by cashing out every couple of years
Replies
22
Views
1,239
Tax, Accounting, Licensing & Legal
providenceventurer
P
Menu
Log in
Register