The Individual Income Tax Law stipulates that interest, dividends and bonuses are subject to individual income tax at a proportional rate of 20%. However, dividends received by individual shareholders from listed companies can be taxed at half.
Article 1 of the Notice of State Taxation Administration of The People's Republic of China of the Ministry of Finance on Relevant Policies of Individual Income Tax on Dividends and Bonuses (Caishui [2005] 102) stipulates that the dividend income obtained by individual investors from listed companies shall be temporarily reduced by 50% and included in the personal taxable income, and individual income tax shall be levied according to the current tax law.