1. Individual income tax shall be paid for dividends obtained by resident individual shareholders from inside and outside China and dividends obtained by non-resident individual shareholders from inside China, with the tax rate of 20%;
2. Dividend income obtained by enterprise shareholders shall be subject to enterprise income tax at a reduced rate of 25%;
3. Dividends obtained by non-resident individuals outside China are not included in this taxation scope;
4. Dividends paid by subsidiaries to shareholders, whether individuals or corporate shareholders, should be taxed according to regulations.
Tax treatment of shareholders' dividends:
1. Personal income tax: when individual shareholders receive dividends, they pay 20% personal income tax according to the item of "dividend income";
2. Enterprise income tax: If the shareholders are enterprises, they can usually deduct their dividends when calculating the taxable income to reduce the burden of enterprise income tax;
3. Pre-tax deduction: before distributing dividends to shareholders, the enterprise income tax should be deducted first;
4. Tax declaration: after receiving dividends, shareholders need to make tax declaration according to law to ensure the correct payment of taxes;
5. Avoid tax avoidance: The tax law has clear provisions on shareholders' dividends to avoid tax evasion through improper means.
To sum up, shareholders need to pay personal income tax or enterprise income tax for dividends, and the tax rates are 20% and 25% respectively. Dividends obtained by non-resident individuals in China are also subject to tax, but dividends obtained by non-resident individuals outside China are not subject to this tax. No matter individuals or corporate shareholders, the dividends of subsidiaries need to be taxed according to regulations.
Legal basis:
Individual Income Tax Law of the People's Republic of China
second
The following personal income shall be subject to personal income tax:
(1) Income from wages and salaries;
(2) Income from remuneration for labor services;
(3) Income from remuneration;
(4) Income from royalties;
(5) Operating income;
(6) Income from interest, dividends and bonuses;
(7) Income from property lease;
(8) Income from property transfer;
(9) Accidental income.
Individual residents who obtain income from items 1 to 4 of the preceding paragraph (hereinafter referred to as comprehensive income) shall calculate individual income tax according to the tax year; Non-resident individuals who obtain income from items 1 to 4 of the preceding paragraph shall calculate individual income tax on a monthly or itemized basis. Taxpayers who obtain income from items 5 to 9 of the preceding paragraph shall calculate individual income tax separately in accordance with the provisions of this law.