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A query was raised regarding the applicable withholding tax rate for a one-year internship contract. The Directorate-General for Tax (DGT) ruled that, as the duration is not less than one year, the general procedure must be applied instead of the minimum rate.
This ruling clarifies that internship contracts lasting exactly one year do not qualify for the reduced 2% withholding rate, requiring taxpayers to follow standard withholding procedures based on projected income.
The tax team reviews your specific situation.
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