Additional Payment Obligations
Many countries (including England) require that, if a payment of interest (or other payments, such as rent under a lease, or payments of royalties) is paid by a resident of that country, the resident must, in certain circumstances, first deduct tax from that payment and account for that tax to the appropriate tax authorities. Any obligation to deduct tax in this way is referred to as ‘withholding tax’. The tax is a tax on the recipient and the payer of interest is, in effect, acting as a tax collector on behalf of the tax authority. See Box 6.1.
KeywordsCapital Adequacy Interbank Market Loan Agreement Capital Requirement Regulation Intergovernmental Agreement
Unable to display preview. Download preview PDF.