Alcoa’s Dividend Faces 30% US Withholding Tax Unless Treaty Benefits Claimed

Dividend Confirmation and Payment Details

Alcoa Corporation has reaffirmed its ordinary dividend payment of USD 0.10 per security for the quarter ending 31 March 2025. The dividend will be paid on 6 June 2025, with the record date set at 20 May 2025. This update clarifies the currency exchange rates and payment arrangements following the initial announcement in May.

Currency Options and Exchange Rates

While the dividend is declared in US dollars, Alcoa offers shareholders flexibility in how they receive their payments. By default, dividends will be paid in Australian dollars to holders of CHESS Depositary Interests (CDIs), unless shareholders opt to receive payments in US dollars, New Zealand dollars, or British pounds sterling by providing appropriate banking details. The company also facilitates payments in other currencies through Computershare's Global Wire payment solution, accommodating international investors’ preferences.

The updated foreign exchange rates used for currency conversions are USD/AUD at 1.54679, USD/NZD at 1.66889, and USD/GBP at 0.74113. These rates reflect the actual exchange rates as of 2 June 2025, ensuring transparency for investors calculating their expected returns in local currencies.

Tax Withholding and Compliance

Alcoa reminds non-resident shareholders that a default 30% withholding tax will be deducted in accordance with US tax law unless the shareholder certifies eligibility for a reduced rate under an applicable tax treaty prior to the dividend record date. Shareholders who have not yet claimed treaty benefits can download the necessary US tax certification forms from the company’s investor website.

Additionally, shareholders with registered addresses in Australia, New Zealand, the United Kingdom, or the United States must provide valid banking or Global Wire payment instructions to avoid payment withholding. Those residing outside these countries will receive payments by cheque in Australian dollars unless they submit valid payment instructions.

Implications for Investors

This dividend update underscores Alcoa’s commitment to accommodating a diverse shareholder base with varying currency preferences and tax circumstances. The mandatory direct credit policy for key jurisdictions ensures timely and secure payments, while the flexibility in currency choice helps mitigate foreign exchange risk for investors. However, the unfranked nature of the dividend and the withholding tax implications remain important considerations for net income calculations.