Introduction to Withholding Tax

The Withholding tax (WHT) is a type tax of where a portion of the income is withheld or retained as tax.

This module allows banks to withhold tax on dividends for fixed income or bonds, except Qualified Domestic Institutional Investor (QDII) bonds. WHT is required to be deducted as a tax based on type of bonds and whether the dividend income derived is for a resident or non-resident investor.

The WHT rates are different for the China government bonds for residents (no WHT), China government bonds for non-residents (10%), financial bond, corporate bonds and commercial paper for individual residents (20%), as well as financial bond and corporate bonds and commercial paper for corporate residents (25%).

The CNWHTX.TAX.DETAILS enquiry has been created as part of this functionality to display the WHT collected for the customer.

Click here to understand the terms and abbreviations used in this functionality.