Dividend Tax Rates Around The World

Dividend tax rate is the rate for income taxes on dividend payments. Dividend payments are portions of the profit that a corporation pays to its shareholders. In other words, this is one of the ways shareholders can earn profits from stocks they invested in. Different countries have different dividend tax rates. Furthermore, each country has its own tax laws, which can further effect just how much profit shareholders earn.

Dividend Tax Rates in United States

As of this writing, United States has some of the lowest dividend tax rates in the world. Shareholders in 10% and 15% income tax brackets don't pay dividend taxes at all - everybody else gets taxed at the same rate as they would for long-term capital gains taxes (up to 15%). However, those rates are scheduled to expire in 2011. Unless the current tax cuts are extended, shareholders in 10% and 15% income tax brackets will be taxed at up to 10% while the rest will be taxed up to 20%.

Dividend Tax Rates throughout the World

The dividend tax rates vary quite a bit depending on the country. In European Union, national rates can be as low as 5% or as high as 29%. In China, the rate is 50%, while Japan's rates are 20%. In Russia, the rates are 9% for Russian nationals and 15% for shareholders from the rest of the world. India, Hong Kong and Iran have no dividend tax at all, but they use other taxes to make up the for it.

Generally speaking, developing nations have lower rates then developed ones.

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