Corporate profits are taxed once inside the company, and when those profits are distributed they can attract another layer of withholding in the hands of the shareholders. The dividend withholding is collected at the moment of distribution by the company, which deducts the tax and passes the remainder to every owner. The rate that applies to a dividend depends on the shareholding and on how the recipient is treated, with listed companies and the small holders who rely on dividends receiving concessions designed to protect retail investors. Since the tax is withheld, a shareholder does not file a special return simply because a dividend was received, but the gross amount disclosed by the company must reconcile with the payment the shareholder actually banks. Companies plan around the distribution point because the tax is unavoidable at payment. Retaining profits avoids the immediate charge but leaves money in the firm, while distributing invites the withholding but returns value to owners. Directors therefore weigh retention against the dividend rate each year, and small shareholders read the net deposit against the gross figure in the annual report.