Withholding tax, also known as retention tax, is applied to various types of investment income, such as dividends, interest, and royalties. The rate at which this tax is charged depends on the source country and the type of income that is being paid. For example, the rate may be different for dividends received from a foreign company compared to dividends received from a domestic company.

The purpose of withholding tax is to ensure that the government receives its share of taxes on investment income. This tax is withheld at the source of income, which means that the tax is paid directly to the government before the income reaches the recipient. This helps to prevent tax evasion and ensures that the government receives its tax revenue in a timely manner.

At FlexInvest, we do not withhold securities for tax purposes. This means that each user is responsible for declaring their own taxes on their investment income. It is important for users to understand the tax laws in their country and to declare their investment income accordingly.