DIVIDENDS RECEIVED DEDUCTION - DRD
Tax reduction received by a company on the dividends paid to it by another firm in which it has ownership interest. The deduction seeks to ease the outcome of triple taxation, which happens because the firm paying the dividend does it using post-tax money and the company receiving it is subject to income tax on the dividends. The money will be taxed three times if the corporation receiving the dividends decide to pay out its shareholders.
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