Withholding Tax

Dictionary Says

Definition of 'Withholding Tax'


1. Income tax withheld from employees' wages and paid directly to the government by the employer.

2. A tax levied on income (interest and dividends) from securities owned by a non-resident.

Investopedia Says

Investopedia explains 'Withholding Tax'


1. The amount withheld is a credit against the income taxes the employee must pay during the year.

2. Tax is deducted not only from dividends, but from other income paid to non-residents of a country.


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