Dividends from foreign corporations qualify for a reduced US tax rate when received by individuals | Norton Rose Fulbright
The US Treasury published a list in late September of countries whose corporations will be favored under the new reduced tax rates on dividends. The United States cut the tax rate that individuals holding shares in corporations have to pay on their dividends to 15% earlier this year. This applies to dividends received from US companies. It does not always apply to dividends received from foreign corporations.
One way dividends from foreign corporations qualify is if the foreign corporation has its tax residence in a country with a “comprehensive” tax treaty with the United States. The US Treasury published a list of such countries in late September. There are 52 countries on the list, including the United Kingdom, Holland, Luxembourg and many other countries in Europe and Asia but only one Latin American country (Venezuela). The Treasury singled out four countries that it said do not have suitable tax treaties. They are Bermuda, the Netherlands Antilles, Barbados and some former Soviet republics still covered by the US-USSR tax treaty. Russia, the Ukraine and Kazakhstan are included among the 52 “good” countries.