Withholding Taxes

For nonresidents, withholding taxes are normally final. For residents, taxes paid can in some cases be credited against the income tax liability.

DIVIDENDS

When dividends or earnings distributed do not arise from the balance of the net tax profit account (see below), tax at the rate of 34% is charged on the paying company on the result of multiplying distributed dividends by a factor of 1.515; therefore, the tax is charged by grossing up the dividend declared. This tax is paid in addition to income tax and is final, although resident individuals may opt to add dividends earned to other taxable income. When dividends are distributed out of the balance of the net tax profit account, no tax is charged. The balance of a company's net tax profit account is computed as follows: