Taxation of dividends and capital gains: A comparison across countries

In the present times, most corporations are looking at taking advantage of globalization and setting up entities across the world. Most countries want to attract foreign capital flows and offer attractive tax regimes to non-resident investors.

This has resulted in an increase in cross-border investments by multinationals. Typically, this creates two additional income streams for the investing entity: (i) ‘capital gains’ when the income stems from the sale of shares/ investments; and (ii) ‘dividends’ which is a periodical return on investment paid by the investee company. Lower tax incidence and ease of compliance enable a jurisdiction to attract investments. We have discussed below the Indian regime and how it stacks against a select few countries.

Please click here to read the full article by Kumarmanglam Vijay, published in Financial Express.