US Treasury Department Updates List of Countries Eligible for Reduced Tax Rates on Dividends Paid by Foreign Corporations
Notice 2024-11: Update to Section 1(h)(11) of the Internal Revenue Code
The US Treasury Department has issued Notice 2024-11, updating the list of countries eligible for reduced tax rates on dividends paid by foreign corporations under Section 1(h)(11) of the Internal Revenue Code.
Changes to the List
- Chile is now included in the list, effective for dividends paid on or after December 19, 2023.
- Hungary and Russia are no longer eligible for reduced tax rates, effective for dividends paid on or after January 8, 2023, and January 1, 2023, respectively.
Countries Eligible for Reduced Tax Rates
The following countries are now included in the list of qualified foreign corporations:
- Australia
- Belgium
- Canada
- Chile (effective December 19, 2023)
- Denmark
- Finland
- France
- Germany
- Greece
- Iceland
- Ireland
- Italy
- Japan
- Luxembourg
- Netherlands
- New Zealand
- Norway
- Portugal
- Spain
- Sweden
- Switzerland
- United Kingdom
Important Considerations
Individual shareholders of Chilean resident corporations may now be eligible for reduced tax rates on dividends paid by those corporations. However, taxpayers should:
- Determine whether the corporation is a qualified foreign corporation meeting the requirements of Section 1(h)(11)
- Evaluate residence and limitation-on-benefits requirements under the US-Chile Treaty
Next Steps
Taxpayers with questions about the updated list or how it affects their specific situation should contact a qualified tax professional or the US Treasury Department’s office of foreign assets control.