Withholding tax

Withholding tax is an amount withheld by the party making payment to another (payee) and paid to the taxation authorities. The amount the payer deducts may vary, depending on the nature of the product or service being paid for. The payee is assessed on the gross amount, and the tax to be withheld (the withholding tax) is computed in that assessment. The purpose of withholding tax is to counteract tax evasion and tax avoidance either by domestic or international taxpayers. In some jurisdictions, the purpose of deduction is also to facilitate or accelerate collection and no assumption about evasion is inferred.
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tax 

withholding tax
n : income tax withheld from employees' wages and paid directly to the government by the employer [syn: withholding]

Noun
1. income tax withheld from employees' wages and paid directly to the government by the employer
(synonym) withholding
(hypernym) income tax
(hyponym) PAYE, pay as you earn

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