Why are double taxation avoidance agreements (DTAs) beneficial to companies repatriating dividends?

Companies repatriating dividends need to be aware of whether or not there is a DTA in place between China and their home country, which can reduce the 10 percent withholding tax on dividends to 5-8 percent. This is not something that tax authorities will bring to their attention. The process of applying for DTA benefits is quite tedious – a preferential tax treatment form needs to be submitted and the parent company must obtain certain forms of documentation from the government of the DTA country/region in question.