Alcoa’s 30% Withholding Tax Raises Questions for International Investors
Alcoa Corporation has announced a quarterly dividend of USD 0.10 per security, payable on August 28, 2025, with a 30% U.S. withholding tax applying by default. Shareholders have multiple currency payment options depending on their residency and banking details.
- USD 0.10 ordinary dividend declared for quarter ending June 30, 2025
- Dividend payable on August 28, 2025, with record date August 12
- Default 30% U.S. non-resident withholding tax applies unless reduced by tax treaty
- Multiple currency payment options including AUD, NZD, GBP, and USD
- Mandatory direct credit payments for holders in Australia, New Zealand, UK, and US
Alcoa’s Latest Dividend Announcement
Alcoa Corporation has declared an ordinary dividend of USD 0.10 per security for the quarter ending June 30, 2025. The dividend will be paid on August 28, 2025, with the ex-dividend date set for August 11 and the record date on August 12. This announcement follows Alcoa’s consistent approach to rewarding shareholders on a quarterly basis.
Tax Withholding and Shareholder Implications
A key feature of this dividend is the application of a default 30% U.S. non-resident withholding tax, as mandated by U.S. tax law. However, shareholders who certify their tax residency in countries with applicable tax treaties may qualify for a reduced withholding rate. Alcoa has provided access to the necessary U.S. tax certification forms via its investor portal, encouraging shareholders to claim treaty benefits before the record date to optimise their returns.
Currency and Payment Logistics
Alcoa offers a flexible currency payment structure. While the dividend is declared in U.S. dollars, holders of CHESS Depositary Interests (CDIs) can elect to receive payments in Australian dollars, New Zealand dollars, British pounds sterling, or U.S. dollars by submitting appropriate banking details by August 12, 2025. For shareholders in Australia, New Zealand, the United Kingdom, and the United States, payments will be made by mandatory direct credit to nominated bank accounts. Those residing outside these countries without valid banking instructions will receive payments by cheque in Australian dollars, unless they opt for Computershare’s Global Wire payment solution.
Unfranked Dividend and Financial Context
The dividend is fully unfranked, meaning it carries no Australian franking credits. This is consistent with Alcoa’s status as a U.S.-based entity distributing dividends to international investors. The AUD equivalent of the dividend will be confirmed closer to the payment date, reflecting prevailing exchange rates as of August 22, 2025.
Looking Ahead for Investors
Investors should note the importance of timely submission of tax residency certifications and banking details to avoid withholding at the default rate or payment delays. The dividend announcement underscores Alcoa’s steady cash flow generation and commitment to shareholder returns, but also highlights the complexities international investors face with cross-border tax and currency considerations.
Bottom Line?
Alcoa’s dividend payment process highlights the balancing act between rewarding shareholders and navigating international tax and currency complexities.
Questions in the middle?
- Will fluctuations in exchange rates materially affect the AUD equivalent dividend received by investors?
- How many shareholders will successfully claim reduced withholding tax rates under U.S. tax treaties?
- Could Alcoa consider a securities plan or alternative dividend mechanisms in future to streamline payments?
