The Tax Office of Arcadia (a fictitious country) just announced that it would scrap the 20%...

 

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The Tax Office of Arcadia (a fictitious country) just announced that it would scrap the 20% withholding tax imposed on interest payments paid to foreign investors holding Arcadian government bonds. Until now, investors from countries with a double-taxation agreement with Arcadia had to wait for two years to claim back a portion of the interest that was withheld. What might be the reason(s) for Arcadia to eliminate this tax? [Max 200 words] The Tax Office of Arcadia (a fictitious country) just announced that it would scrap the 20% withholding tax imposed on interest payments paid to foreign investors holding Arcadian government bonds. Until now, investors from countries with a double-taxation agreement with Arcadia had to wait for two years to claim back a portion of the interest that was withheld. What might be the reason(s) for Arcadia to eliminate this tax? [Max 200 words]

Answer rating: 100% (QA)

There are several potential reasons why Arcadia might choose to eliminate the withholding tax on int... View the full answer