Withholding tax

As a withholding tax ( income ) tax is referred on income that is deducted directly at the source of payment of performance fees and on behalf of the service provider (creditor of compensation ) is paid to the competent tax office. It is designed either as an advance on the appropriate income tax or configured as a flat tax.

If the withholding tax have been designed as a flat tax, this can lead to a simplification of the process, especially if foreign payment creditor does not have to register for tax in the country in which the tax should be fixed. Withholding taxes are also used to ensure tax revenue, since already from the ( liquid ) the remuneration debtor, who is now responsible for the transfer to the Treasury, a survey is conducted.

Examples:

• Germany: Bauabzugsteuer, income tax ( Germany ), capital gains tax ( Germany ), interest income tax; See also withholding tax ( Germany )
• Austria: income tax, capital gains tax
• Switzerland: capital gains tax, see Withholding tax ( Switzerland )
• EU, Switzerland and some other countries: European interest tax ( withholding tax )

• Tax law
• Wage tax