Withholding Tax

Withholding Tax (WHT) definition

/wɪðˈhəʊldɪŋ/ /taks/

What does Withholding Tax mean?

Also called WHT, it is a method of collecting tax at source from the person making a payment (often interest) rather than raising a tax assessment on the recipient. The payer must withhold the necessary income tax from the payment (in respect of UK source yearly interest, it is the basic rate of income tax, ie 20% of the gross payment), account to the tax authority for that tax (in the UK, HMRC), submit returns and issue a statement or certificates to the recipient.

Withholding Tax explained

Exemptions and reliefs from the WHT obligation on interest are available provided the relevant conditions are satisfied.

Variances

WHT
UK withholding tax

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