Retention Tax

AAA

DEFINITION of 'Retention Tax'

A mandatory tax placed on income that is earned on investments in a country that is not the resident's home country. This only applies to countries that are members of the European Union (EU).

INVESTOPEDIA EXPLAINS 'Retention Tax'

The retention tax was set up by the EU in 2005 to prevent individual investors from avoiding taxes on their income by investing their money in other countries. The rates are scaling, and will rise to a level of 35% by 2011.

RELATED TERMS
  1. Taxes

    An involuntary fee levied on corporations or individuals that ...
  2. Tax Haven

    A country that offers foreign individuals and businesses little ...
  3. Value-Added Tax - VAT

    A type of consumption tax that is placed on a product whenever ...
  4. Tax Evasion

    An illegal practice where a person, organization or corporation ...
  5. Capital Gain

    1. An increase in the value of a capital asset (investment or ...
  6. European Union - EU

    A group of European countries that participates in the world ...
Related Articles
  1. Taxes

    Changes In Tax Legislation And Regulation

    Keeping on top of these amendments can help you avoid penalties and take advantage of benefits.
  2. Taxes

    3 Common Tax Questions Answered

    We clarify some rules that often puzzle taxpayers.
  3. Forex

    What to Expect After the Swiss Currency Shock

    What to expect for the world economy after the Swiss currency shock.
  4. Personal Finance

    Value-Added Tax (VAT)

    Value-added tax, or VAT, is a tax on the added value of a good as it moves through the supply chain to the end consumer. In effect, the tax is levied on the gross margin at each point in the ...
  5. Retirement

    Who is exempt from paying Social Security taxes?

    Learn about the groups of people who qualify for exemption from Social Security taxes, and explore the process of applying for exemption.
  6. Taxes

    Can you write variable costs off your taxes?

    Learn if you can deduct variable or fixed costs from your business taxes and learn more about business deductions, cost of goods sold and gross profit.
  7. Economics

    How is the invisible hand affected in a communist or socialist economy?

    Discover why the invisible hand of the market is compromised by socialist and communist economies, where the government controls the means of production.
  8. Economics

    What is the affect of the invisible hand on the government?

    Find out why government policy goals are often frustrated by the same forces that guide the invisible hand of the market towards efficient outcomes.
  9. Economics

    How does the invisible hand affect a capitalist economy?

    Take a deeper look at how the invisible hand of the market works and why it is so crucial for understanding how capitalist economies function.
  10. Taxes

    What are the tax incentives or disincentives to vertical integration?

    Merging companies through vertical integration can provide companies in the United States with a marginally advantageous position in terms of taxation.

You May Also Like

Hot Definitions
  1. Command Economy

    A system where the government, rather than the free market, determines what goods should be produced, how much should be ...
  2. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  3. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  4. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  5. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  6. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
Trading Center