What is U.S. withholding of tax on nonresident aliens and foreign corporations (“Alien Tax”)?
Alien tax (or NRA withholding) is a term used to describe the U.S. federal income tax withheld at source on certain types of U.S. source fixed or passive income, such as interest or dividends, when paid to nonresident alien individuals, foreign corporations and other foreign persons. The alien tax generally applies to fund distributions of ordinary income dividends. Fund distribution of short- and long-term capital gains, interest-related dividends and tax-exempt interest dividends are not generally subject to the alien tax.
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