Virus-Hit Companies Scrambling to Cancel Dividends Face Tax Hit

Corporate directors trying to meet their fiduciary responsibility to maintain cash reserves by canceling dividends during the coronavirus pandemic could see much of the savings eaten up by surprise tax bills.

Companies are being forced to reconsider how they deploy their cash reserves during the coronavirus outbreak, with many pondering if they should drop or delay their planned dividends. Additionally, some governments are banning financial aid to companies that pay dividends or complete share buybacks.

Regulations differ between countries, but multinationals need to be aware of how the rules apply to each entity as the details of these procedures could ...