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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Neil H who wrote (7962)	2/28/2011 7:13:13 AM
From: Bocor	Read Replies (1) \| Respond to of 34328

before considering foreign stocks, be sure to know what country taxes your dividends: Withholding Tax Rates by Country for Foreign Stock Dividends One of the factors that investors need to consider when investing in foreign stocks is taxes since it reduces the effective rate of return on an investment. Governments of most countries try to recoup millions in taxes from dividends that are paid to foreign investors by companies located in their countries. For example, when a U.S.-based investor invests in France Telecom (TEF) ADRs, the French government will deduct 25% in taxes on all dividends paid. Hence, though TEF currently has a 6.98% dividend yield, the actual yield that this investor receives will be less. However, the IRS allows a foreign tax credit (filed with IRS Form #1116) to be taken using which this investor can deduct the taxes paid to the French government. This is done to avoid double taxation of dividends. There is a maximum limit to this tax credit. A few countries do not charge any taxes on dividends paid to foreign investors. So foreign investors receive the entire dividends paid by companies based in those countries. For example, the U.K. charges no taxes on dividends paid by British companies (excluding REITS) to U.S. investors. So an investor in National Gird Plc (NGG) will receive the complete dividends paid at the current dividend yield of 4.68%. The table below lists the countries that have no withholding taxes on dividends paid to U.S. residents: S.No. Country Tax Withholding Rate for Dividends 1 Argentina 0.00% 2 Bahrain 0.00% 3 China - Red Chips 0.00% 4 Colombia 0.00% 5 Crotia 0.00% 6 Cyprus 0.00% 7 Egypt 0.00% 8 Estonia 0.00% 9 Hong Kong - Local Shares ^ 0.00% 10 India 0.00% 11 Jordan 0.00% 12 Mauritius 0.00% 13 Oman 0.00% 14 Qatar 0.00% 15 Singapore 0.00% 16 Slovakia 0.00% 17 South Africa 0.00% 18 Tunisia 0.00% 19 UK 0.00% 20 UAE 0.00% 21 Vietnam 0.00% The following table below shows the withholding tax rates by country on dividends paid to U.S. residents: S.No. Country Withholding Tax Rate for Dividends 1 Australia 30.0% 2 Austria 25.0% 3 Bangladesh 15.0% 4 Belgium 25.0% 5 Bosnia 5.0% 6 Brazil 15.0% 7 Bulgaria 15.0% 8 Canada 15.0% 9 Chile 35.0% 10 China - A Shares* 10.0% 11 China - B Shares 10.0% 12 China - C Shares* 10.0% 13 Czech Republic 15.0% 14 Denmark 28.0% 15 Finland 28.0% 16 France 25.0% 17 Germany 26.4% 18 Greece 10.0% 19 Hungary 10.0% 20 Iceland 15.0% 21 Indonesia 20.0% 22 Ireland 20.0% 23 Israel 20.0% 24 Italy 27.0% 25 Japan 10.0% 26 Kazakhstan 15.0% 27 Kenya 10.0% 28 Kuwait 15.0% 29 Latvia 10.0% 30 Lebanon 10.0% 31 Lithuania 15.0% 32 Luzembourg 15.0% 33 Macedonia 10.0% 34 Malaysia 25.0% 35 Malta 35.0% 36 Mexico 10.0% 37 Moroccco 10.0% 38 The NETHERLANDS 15.0% 39 New Zealand 30.0% 40 Nigeria 10.0% 41 Norway 25.0% 42 Pakistan 10.0% 43 Peru 4.1% 44 Philippines 30.0% 45 Poland 19.0% 46 Portugal 20.0% 47 Romania 16.0% 48 Russia 15.0% 49 Saudi Arabia 5.0% 50 Serbia 20.0% 51 Slovenia 20.0% 52 South Korea 27.5% 53 Spain 19.0% 54 Sri Lanka 10.0% 55 Sweden 30.0% 56 Switzerland 35.0% 57 Taiwan 20.0% 58 Thailand 10.0% 59 Turkey 15.0% 60 UK - REITS only 20.0% 61 Ukraine 15.0% Companies incorporated in mainland China and listed in Shanghai and Shenzhen. These companies are quoted in Renminbi and are only available to Mainland and Qualified Foreign Institution Investors (QFII). * Companies incorporated in mainland China and listed in Shanghai and Shenzhen. B-shares in Shanghai are traded in U.S. dollars, while B-shares in Shenzhen are traded in Hong Kong dollars. B-shares are available to mainland and foreign investors. ***Companies incorporated in mainland China and listed on the Hong Kong Stock Exchange. ^Companies incorporated in Hong Kong and listed on the Hong Kong Stock Exchange. Source: Dow Jones Indexes, Other