What withholding tax rate is applied to investments in REITs?

The correct withholding tax rate applied to investments in Real Estate Investment Trusts (REITs) for foreign investors generally depends on various factors, including the specific country’s tax laws, tax treaties, and the type of income generated. In many jurisdictions, including the United States, a common withholding tax rate for distributions from REITs to foreign investors is actually 30%. However, tax treaties between countries can often reduce this rate.

If your response indicates that the withholding tax rate is 20%, it is likely based on the assumption of tax treaty benefits not being fully utilized or that a specific scenario was referenced; otherwise, the standard rate often cited is 30%.

When considering the application of withholding tax rates in REIT investments, it is important to also review any applicable tax treaties that may apply to the investors or specific circumstances, as these can lower the rate. In many cases, investors should consult a tax professional for precise information as it can vary by taxpayer status and the specific type of income generated by the investment in the REITs.