Corporate Finance Class Exercise 3

United Kingdom (U.K.)

Individuals earning dividend income in the United Kingdom may be subject to the Dividend Tax. The
tax rates for the current fiscal year (2022/2023) are 7.5% for basic rate taxpayers, 32.5% for higher
rate taxpayers, and 38.1% for additional rate taxpayers. There is also a tax-free dividend allowance,
which allows dividends to be received tax-free up to a certain amount.

Japan

Dividend income in Japan is taxed at the individual level. The standard tax rate on dividend income is
20.315% as of 2022, but this rate can be decreased by different exclusions and deductions. Certain
dividends paid by Japanese firms may be eligible for preferential tax treatment, resulting in a lower
effective tax rate. It is critical to analyze the unique circumstances and applicable tax treaties.

South Africa

Dividends tax is imposed in South Africa on shareholders who receive dividend payments. Dividends
will be taxed at a rate of 20% beginning in 2022. Companies that declare dividends must withhold
and remit this tax to the South African Revenue Service (SARS) on behalf of their shareholders. Based
on tax treaties, special restrictions may apply to tax-exempt businesses and some non-resident
owners.