Navigating Withholding Tax on Investment Income for Charities Update
· Posted on: February 13th 2025 · read
Early in September 2024, the Charity Recent updates have highlighted the complexities charities face regarding withholding tax on investment income.
(Charity Tax Group – Jan 2025 Newsletter) Withholding tax, deducted at source on income such as dividends or interest from foreign investments, can significantly impact a charity’s revenue streams.
Key Considerations for Charities
Charities may be eligible for reduced withholding tax rates. However, reclaiming this tax can be challenging due to varying procedures and time limits across jurisdictions.
Action Steps for Trustee
- Review Investment Portfolios: Identify income sources where withholding tax has been deducted and assess eligibility for tax relief or exemptions.
- Understand Reclaim Procedures: Familiarise yourself with the specific reclaim processes and deadlines of countries where investments are held.
- Seek Professional Assistance: Engage with tax professionals experienced in cross-border taxation to navigate the complexities of reclaiming withholding tax.
By proactively managing withholding tax issues, charities can enhance their investment returns, thereby increasing the funds available to support their charitable objectives.
