# Dividend Withholding Tax

*Taxes — Finicade finance glossary*

Dividend withholding tax is deducted at source by the country where a company is based before the dividend leaves for a foreign shareholder. Rates run from zero to 35% and are often reduced by treaty. In a taxable account a foreign tax credit usually recovers it; inside a retirement account it's frequently unrecoverable, which is a quiet, permanent drag on international holdings held in the wrong wrapper.

**Also known as:** withholding tax, foreign withholding tax

**Related terms:** [Tax Treaty](https://finicade.com/glossary/tax-treaty), [Dividend](https://finicade.com/glossary/dividend), [American Depositary Receipt (ADR)](https://finicade.com/glossary/american-depositary-receipt), [Double Taxation](https://finicade.com/glossary/double-taxation), [Emerging Markets](https://finicade.com/glossary/emerging-markets)

Source: https://finicade.com/glossary/dividend-withholding-tax