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Notice 2011-64: Countries Qualifying for Reduced Dividend Tax Rates

2011-08-18

Since 2003, dividends paid to individual shareholders from either a domestic corporation or a "qualified foreign corporation" are subject to tax at the reduced rates applicable to certain capital gains.  A qualified foreign corporation includes certain foreign corporations that are eligible for benefits of a comprehensive income tax treaty with the United States.  Notice 2011-64 provides the most recent list of the U.S. income tax treaties that meet the requirements under Code §1(h)(11). 

The previous lists of the comprehensive income tax treaties were in Notices 2003-69 and 2006-101.  The newest list in Notice 2011-64 adds Bulgaria and Malta.  

Notice 2011-64 also specifies that for purposes of determining whether the limitation on benefits clause of the treaty is met, the foreign corporation must be "treated as though it were claiming treaty benefits, even if it does not derive income from sources within the United States."

The following is a list of the treaties from Notice 2011-64:

Australia
Austria
Bangladesh
Barbados
Belgium
Bulgaria
Canada
China
Cyprus 
Czech Republic 
Denmark 
Egypt 
Estonia 
Finland 
France
Germany 
Greece 
Hungary 
Iceland 
India 
Indonesia 
Ireland 
Israel 
Italy 
Jamaica 
Japan 
Kazakhstan 
Korea 
Latvia 
Lithuania 
Luxembourg 
Malta
Mexico 
Morocco 
Netherlands 
New Zealand 
Norway 
Pakistan 
Philippines 
Poland 
Portugal 
Romania 
Russian Federation 
Slovak Republic   
Slovenia 
South Africa 
Spain 
Sri Lanka 
Sweden 
Switzerland 
Thailand 
Trinidad and Tobago 
Tunisia 
Turkey 
Ukraine 
United Kingdom 
Venezuela

Tags: 1(h)(11) Qualified Dividend Income