Do dividends from foreign corporations qualify for the lower tax rate?
Foreign corporations only qualify if they are incorporated in a U.S. possession or country that currently has a tax treaty with the U.S. However, a foreign corporation that does not meet either requirement will still be treated as a qualified foreign corporation if the stock of the corporation on which the dividend was paid is readily tradable on an established securities market in the United States. Please see IRS bulletin 2003-42 for further information.
