Dividends Tax Q&A

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What you need to know about Dividends Tax

On 1 April 2012 the new Dividends Tax (DT) replaces Secondary Tax on Companies (STC). Set out below are some of the more common questions that affected parties are asking.

How will DT differ from STC?

Apart from the rate, Dividends Tax is a fundamentally different tax from Secondary Tax on Companies in two respects.
First, whereas Secondary Tax on Companies is a tax on the declaring company, Dividends Tax is a tax on the shareholder - or, more specifically, the “beneficial owner” of the dividend (in the case of cash dividends).
Secondly, DT is a “withholding tax”.

The only exception to this default position is in the case of dividends in specie and deemed dividends, i.e. the DT rules on in specie dividends and deemed dividends are in fact very similar to the STC rules.

Find out more about the new Dividends Tax and answers to questions like:

  • What is the DT rate?
  • What is a “withholding” tax?
  • What do companies need to do on 1 April 2012?
  • When is a company NOT liable to withhold DT?