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It's a C Corporation. I have the EIN. But what about the TN Sales & Use tax or Franchise & Excise Tax
Sorry I should have given more detail. I'm from the UK. The C Corp will be owned by a UK Holding Co so I don't really want the income taxed at the individual level as the corporate level is lower.
Is it only the Franchise & Excise Tax that will be applicable then?
The UK/US double tax treaty appears to reduce the dividend withholding rate to zero if:
- the UK Co (being the beneficial holder of the dividend) holds more than 80% of the voting power of the US Corp for 12 months prior to the dividend being declared,
- is owned by 7 or fewer "equivalent beneficiaries"...........I assume UK resident individual who owns 100% of the share capital of the UK Co would meet the definition
- less than 50% of the gross income of the US Corp is distributed to persons who are not equivalent beneficiaries................which obviously doesn't apply since if the UK Co is 100% owned by an equivalent beneficiary
satisfies the other conditions of the dividends article (10) which all seem to consider permanent establishments. So if the UK Co is simply a holding company then those points become irrelevant.
Is my understanding correct on this
I'm still not clear why the clauses from the treaty I've described above wouldn't exempt the dividends from witholding tax. Do you have any more information on this.