Tax withheld on withdrawal
The arrangement whereby a broker acting as tax agent withholds tax not only at year end but also when money is taken off the account, based on the result recorded as of that date.
How to read the number
That is why less arrives than was requested, and why the year is recalculated afterwards: an excess withholding comes back, a shortfall is taken at the end of the period.
When the metric lies
The calculation uses the profit accumulated by the moment of withdrawal. A loss taken later in the same year reduces the tax only at the annual recalculation, and until then the money sits with the budget.
Also known as: withholding on cash withdrawal