Withholding tax sits awkwardly between disciplines. Unlike corporate or consumption tax, it needs payroll and HR knowledge as well as accounting and tax, which is why a lot of otherwise strong finance people quietly avoid it.

It is also close to unavoidable at a foreign-owned company. Almost everyone in that seat has run into it in one form or another. The main categories are:

• Payments of remuneration to individuals
• Dividend payments
• Borrowings and interest
• Royalties

For each of these, filing a tax treaty application with the tax office in advance can reduce or eliminate the withholding.

Use the right form

The forms differ by payment type, and using the correct one matters. I got this wrong myself the first time I prepared a treaty application, having not realised the form was type-specific.

Which form applies, and what supporting documents you need to attach, depends on the particular arrangement. If you have something specific in front of you, please get in touch.