U.S. Withholding Tax Rates on REIT Ordinary Dividends
AS OF JULY 1, 2003
NOTE: The withholding rate is 30% if the
non-U.S. shareholder does not reside
in the below countries
U.S. Income & Capital Tax Treaties with...
Individual
Non-Individual Entity
Pension Trust
Tax-Exempt Charity
Governmental Entity (I.R.C. §892)
Armenia
30%
30%
30%
30%
0%
Australia
15%1
15%3
15%3
15%3
0%
Austria
15%1
30%
30%
30%
0%
Azerbaijan
30%
30%
30%
30%
0%
Barbados
15%1
15%2
30%
30%
0%
Belarus
30%
30%
30%
30%
0%
Belgium
15%
15%2
15%2
15%2
0%
Canada
15%1
30%
0%4
0%4
0%
People's Rep. of China
10%
10%
10%
10%
0%
Cyprus
15%
15%2
15%2
15%2
0%
Czech Republic
15%1
30%
30%
30%
0%
Denmark
15%
15%3
15%3
15%3
0%
Egypt
15%
15%2
15%2
15%2
0%
Estonia
15%1
30%
30%
30%
0%
Finland
15%1
30%
30%
30%
0%
France
15%1
30%
30%
30%
0%
Georgia
30%
30%
30%
30%
0%
Germany
15%1
30%
30%
0%
0%
Greece
30%
30%
30%
30%
0%
Hungary
15%
15%2
15%2
15%2
0%
Iceland
15%
15%2
15%2
15%2
0%
India
15%1
30%
30%
30%
0%
Indonesia
15%
15%5
15%5
15%5
0%
Ireland
15%1
15%3
15%3
15%3
0%
Israel
25%1
30%
30%
30%
0%
Italy12
15%
15%6&7
15%6&7
15%6&7
0%
Jamaica
15%
15%7
15%7
15%7
0%
Japan
15%
15%7
15%7
15%7
0%
Kazakstan
30%
30%
30%
30%
0%
Republic of Korea
15%
15%7
15%7
15%7
0%
Kyrgyzstan
30%
30%
30%
30%
0%
Latvia
15%1
30%
30%
30%
0%
Lithuania
15%1
30%
30%
30%
0%
Luxembourg
15%1
15%3
15%3
15%3
0%
Mexico14
10%1
30%
30%
0%
0%
Moldova
30%
30%
30%
30%
0%
Morocco
15%
15%7
15%7
15%7
0%
Netherlands
15%8
30%9
0%4
0%4
0%
New Zealand
15%
15%
15%
15%
0%
Norway
15%
15%
15%
15%
0%
Pakistan
30%
30%10
30%10
30%10
0%
Philippines
25%
25%11
25%11
25%11
0%
Poland
15%
15%2
15%2
15%2
0%
Portugal
15%8
30%
30%
30%
0%
Romania
10%
10%
10%
10%
10%
Russia
30%
30%
30%
30%
0%
Slovakia
15%1
30%
30%
30%
0%
Slovenia
15%1
15%3
15%3
15%3
0%
South Africa
15%1
30%
30%
30%
0%
Spain
15%8
30%
30%
30%
0%
Sweden
15%1
30%
30%
30%
0%
Switzerland
15%1
15%3
0%13
15%3
0%
Tajikistan
30%
30%
30%
30%
0%
Thailand
15%8
30%
30%
30%
0%
Tobago and Trinidad
25%
25%7
25%7
25%7
0%
Tunisia
20%8
30%
30%
30%
0%
Turkey
20%1
30%
30%
30%
0%
Turkmenistan
30%
30%
30%
30%
0%
Ukraine
30%
30%
30%
30%
0%
United Kingdom
15%8
15%3
0%4
15%3
0%
Uzbehistan
30%
30%
30%
30%
0%
Venezuela
15%1
15%3
0%
15%3
0%
Footnotes
30% tax rate if shareholder owns 10% or more of the REIT's stock, or, in the case of individuals residing in Australia, Ireland, Mexico (after Sept. 1, 2003), Slovenia, the U.K., and Venezuela, if the shareholder owns more than 10% of the REIT's stock.
5% tax rate if corporate shareholder owns at least 10% of the REIT's voting stock, and in the case of REIT dividends paid to a corporation based in Cyprus, Egypt, or Iceland no more than 25% of the REIT's gross income consists of interest and dividends.
15% rate only if (1) the dividend is paid with respect to a class of stock that is publicly traded and the shareholder owns no more than 5% of any class of the paying REIT's stock, or (2) the stockholder holds no more than 10% of the REIT's stock if the REIT's property portfolio is diversified, i.e. no property is worth more than 10% of the REIT's real estate holdings. Otherwise, the withholding rate is 30%. For these purposes, a publicly traded Austrian Property Trust is deemed owned directly by its investors.
0% if the pension trust satisfies the tests detailed in footnote 3, or, in the case of Canada and the Netherlands, the dividend is not from a related person.
10% tax rate if shareholder owns at least 25% of the REIT's voting stock.
5% tax rate if shareholder owns more than 50% of the REIT's shares for the 12 months before the dividend is declared.
10% if shareholder owns at least 10% of the REIT's voting stock (except in the case of Jamaica), and no more than 25% of the REIT's income consists of dividends and interest.
30% tax rate if shareholder owns 25% or more of the REIT's stock.
15% tax rate applies to a shareholder that is a beleggingsinstelling (roughly, a Dutch counterpart to a REIT).
15% tax rate if shareholder owns more than 50% of the REIT's voting stock.
20% tax rate if shareholder owns at least 10% of the REIT's voting stock.
The U.S. Senate has approved a new treaty that contains the same withholding rates as in footnote 3, but the Italian legislature has not ratified it yet.
To qualify for this exemption, the Swiss pension trust must convince the IRS that it “generally corresponds” to a tax-exempt U.S. pension trust.
In 2002, the U.S. and Mexico signed a Protocol to the U.S.-Mexico Treaty that will adopt the REIT dividend policy described in footnote 3 and will eliminate withholding on ordinary dividends paid to pension plan residents in the other country. The Protocol entered into force on July 3, 2003, and is effective for dividends credited on or after Sept. 1, 2003.
Real Estate Portfolio® is the magazine for REITs and real estate investment.
It is published bimonthly by the National Association of Real
Estate Investment Trusts® (NAREIT), 1875 I Street, NW, Suite 600, Washington, DC 20006–5413.
Phone 202-739-9400.
