prepayment taxes

prepayment taxes
Taxes paid in some jurisdictions (for example, France, Ireland) when dividends are made. On paying a dividend, the paying company is required to pay an amount that can be offset against its own liability to tax. The investor is usually entitled to a repayment of the tax or a credit against his tax liability for part or all of this prepayment tax under either domestic law or a double taxation treaty. The UK withdrew the right of repayment (except under tax treaties) from 6 April 1999.

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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