First, in light of the new dividend tax regulations recently put forth
by the Bush administration, if I incorporate a C corporation, when the
company pays out dividends will the shareholders be exempt from paying
dividend tax? Starting what date do these regulations apply (what if
we issue dividends in several months, will there be tax to
shareholders on them)?
Second, I'm an Israeli citizen under F-1 student status. As you know,
there is a tax treaty between the US and Israel relating to capital
gains and dividend tax. As a shareholder in a US company that pays me
dividends, will I also be exempt of taxes? If not, what would be the
tax rate that I would have to pay be? Are the taxes paid by the
company or by me as an individual? To which government are they paid?
I don't think anyone knows the answer to that question because nothing
has moved past the talking stage. The President can change
regulations, but the Tax Code is not a regulation, it is a law. Laws
are made in the legislative branch of the federal government, not in
the executive branch. The Tax Code can be changed only by Congress,
though the President is free to suggest changes to it.
 I could use some help again...
 Lost Licences |
(1) New Dividends Tax Regulations; and (2) As Related to Foreign Residents