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EMPLOYMENT In most jurisdictions, employers are required to deduct tax from salary. ''(See Tax Withholding In The United States , PAYE and Internal Revenue Code 3401 ).'' This is often seen as inequitable where it is conventional for self-employed people pay their taxes at the end of the year (although, in the United States, they are required to pay estimated tax each quarter or face interest). Furthermore, the cost to employers of acting as unpaid tax collectors is not trivial. CONTRACT AND CONSULTANCY WORK In some jurisidictions, basic rate taxation is withheld from contract and consultancy payments. The consultant may continue to be liable for higher rate tax on the remainder. DIVIDEND TAXATION A minimum rate of tax may be deducted at source from Dividend payments, in addition to Corporation Tax . In the USA, This Is Still Seen As Controversial . In the United Kingdom, the tax is not particularly explicit: tax is withheld at source and the only obvious indication is disingenuously-named "tax credit" on the dividend statement, meaning that this is the amount of tax already paid: higher-rate tax-payers have further tax to pay. The position that arises if the share-holder is not resident in the country concerned is complicated. The country where the dividend is paid may withhold tax and simply retain it, or it may permit payment gross but inform the tax authorities in the country of residence (though not in the case of Tax Haven s!). SAVINGS INTEREST TAXATION A minimum rate of tax may be deducted at source from savings interest payments. In the form to claim exemption. In the Republic Of Ireland , the tax is explicit and is known as Deposit Interest Retention Tax or "DIRT". The position that arises if the saver is not resident in the country concerned is complicated again. Where there is an International Double Taxation Agreement (or Tax Treaty ), the country where the interest is paid may withhold tax, or it may permit payment gross but inform the tax authorities in the country of residence. (In the European Union , Some Member States Offer The Saver A Choice Of Method To Apply ). SEE ALSO
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