In certain markets, a large share of total dividends may come from a small number of high-dividend-paying companies. This kind of concentration shapes the overall dividend landscape, influencing payout cycles and the flow of cross-border income.
From a withholding tax perspective, when a single company accounts for a significant portion of national distributions, its dividends can represent a large share of an investor’s total reclaim opportunity.
In this article, we explore three examples where dominant payers may have an outsized effect on withholding tax exposure, purely due to the sheer scale of their payouts relative to the local market.
1. Taiwan Semiconductor Manufacturing Co. (TSMC)
2. A.P. Moller – Maersk
3. BHP Group
Market: Taiwan
Reclaim Exposure Impact: Dividend concentration in a high-complexity market
TSMC, the world’s largest contract chipmaker, has grown into a national financial heavyweight, accounting for nearly 40% of Taiwan’s stock market by capitalization. In 2023, TSMC paid out US$9.35 billion in dividends, a significant share of all dividends distributed in the Taiwanese market that year¹.
Taiwan’s 21% statutory withholding tax rate is among the highest in the region. While many tax treaties provide for reduced rates of 10% or 15%, relief and recovery depend on strict documentation standards and procedural accuracy. Taiwan is a particularly complex reclaim environment: the process includes completion of FINI account registration and taxpayer ID issuance, adherence to regional filing rules, local tax agent requirements and strict beneficial owner declarations.
Given TSMC’s scale, investors holding Taiwanese equities may see a large portion of their reclaimable withholding tax tied to just one or two dividend events. That makes accurate processing and timely recovery of these dividends especially important for overall fund performance.
Market: Denmark
Reclaim Exposure Impact: A single issuer reshaping national dividend flows
A.P. Moller – Maersk, the Danish shipping and logistics leader, issued some of the largest dividends in Nordic history in the years following the pandemic. In 2021, it paid approximately DKK 47 billion (about US$6.9 billion), followed by an even larger DKK 79 billion (over US$11 billion) in 2022². These payouts accounted for the majority of Denmark’s dividend growth over that period.
Denmark imposes a 27% withholding tax on dividends to foreign shareholders, typically reduced to 15% under treaty provisions or where the investor is resident in a jurisdiction that has concluded a Tax Information Exchange Agreement (TIEA) with Denmark.
As in many Nordic markets, reclaiming the difference requires detailed documentation and precise treaty application. These requirements have become even more stringent following Denmark’s exposure to Cum-Ex fraud.
Given Denmark’s high withholding tax rate, Maersk’s outsized dividends meant that a single event could result in significant tax being withheld in one go. This places added pressure on investors to ensure their reclaim process is both accurate and fully comprehensive.
Market: Australia
Reclaim Exposure Impact: Mega-payouts in a tightly regulated tax system
BHP, a global mining company producing iron ore, copper, and other key resources, has long played a central role in Australia’s dividend landscape. In early 2019, it issued a US$5.2 billion special dividend, which made up more than one-third of all dividends paid in the Australian market that quarter³.
Australia operates a dividend imputation system aimed at preventing the double taxation of corporate profits. Under this framework, Australia differentiates between franked dividends (which are exempt from withholding tax for non-residents) and unfranked dividends (which carry a 30% default withholding tax, subject to treaty relief). Special or irregular payments, such as BHP’s 2019 distribution following its US asset sale, are not always fully franked and require careful classification and treaty application to avoid overpayment or missed recovery opportunities.
As a result, special payouts of unfranked dividends from a major issuer like BHP can carry significant withholding tax implications for investors. Accurate classification and dividend event monitoring are essential to avoid loss of reclaimable value.
When just one or two companies account for a major share of national distributions, reclaim exposure can become concentrated and small errors on key events can lead to outsized value leakage.
At WTax, we specialize in helping clients manage all aspects of withholding tax exposure.
Our event-level tracking, jurisdiction-specific expertise and robust documentation workflows ensure that no high-impact dividend event goes unnoticed or unclaimed, including in markets where reclaim value is concentrated in just a few dominant payers.
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Images used in this article are for illustrative purposes only and do not depict actual assets or operations of the companies mentioned.