Foreign (overseas) dividends are "qualified" dividends under United States tax law, according to the IRS, if the following requirements are met:
-
The (foreign) corporation is also incorporated in a U.S. possession.
-
The foreign corporation is eligible for the
benefits of a comprehensive income tax treaty with the United States
that the Treasury
Department determines is
satisfactory for this purpose, and that includes an exchange of
information program.
-
The corporation does not meet (1) or
(2) above, but the stock for which the dividend is paid is readily
tradable on an established
securities market in the United
States.
For further details on that, you can refer to IRS Publication 17 (2016). A courtesy link to the relevant section of that document is included below:
https://www.irs.gov/publications/p17/ch08.html#en_US_2016_publink1000171592
In short, the dividends paid by most larger foreign companies, and publicly traded foreign companies, will satisfy the US definition of "qualified dividends," and are thus eligible for reduced tax rates.
Thank you for asking this important question.
