What is Dividend Notification?

Dividends are the profits that shareholders regularly distribute from listed companies at a certain rate. Dividends are the residual profits distributed to shareholders in proportion to their shareholdings after the listed company distributes dividends. Obtaining dividends and dividends is the basic purpose for investors to invest in listed companies, and it is also the basic economic rights of shareholders.

Dividends

Generally speaking, after the annual accounting and settlement of a listed company, a listed company will distribute a portion of its profits as dividends to shareholders based on the number of shares held by shareholders. According to listed companies

Shareholders pay dividends

Dividends and dividends cannot be distributed to shareholders until profits are obtained. Listed companies generally do this after the company's business year is closed. In practice, some listed companies make final accounts twice a year, once in the middle of the business year and once at the end of the business year. Appropriate to shareholders twice

Although there are four forms of dividends issued by listed companies, listed companies in the Shanghai and Shenzhen stock markets generally only use stock dividends and dividends.

Implemented on September 8, 2015, dividends from individuals with a holding period of more than one year are exempt from tax.

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Responsible persons said that since January 1, 2013, a differentiated personal income tax policy has been implemented for dividends received by listed companies. Different tax policy treatments are given according to the length of time the shares are held. The main content: For shares held within 1 month, 1 month to 1 year, and more than 1 year, the dividend dividend income is calculated as full amount, 50% and 25%, respectively. The taxable income is subject to a personal income tax of 20%, that is, the actual tax burden is 20%, 10%, and 5%, respectively. The main purpose of implementing this differentiated taxation policy is to give play to the guiding role of taxation policy, encourage long-term investment, and promote the long-term stable and healthy development of China's capital market.

1. Why adjust the differentiated individual income tax policy for listed companies' dividends?

Answer: Since January 1, 2013, we have implemented a differentiated personal income tax policy on dividends received from listed companies. Different tax policy treatments are given according to the length of time the shares are held. The main content: For shares held within 1 month, 1 month to 1 year, and more than 1 year, the dividend dividend income is calculated as full amount, 50% and 25%, respectively. The taxable income is subject to a personal income tax of 20%, that is, the actual tax burden is 20%, 10%, and 5%, respectively. The main purpose of implementing this differentiated taxation policy is to give play to the guiding role of taxation policy, encourage long-term investment, and promote the long-term stable and healthy development of China's capital market.

This time, with the approval of the State Council, starting from September 8, 2015, the differentiated individual income tax policy for dividends from listed companies has been appropriately adjusted, and tax incentives have been strengthened for investors who have held shares for more than one year. If the shares are more than one year old, the dividends and dividends received will be temporarily exempt from personal income tax. At the same time, for holding shares within one month and one month to one year, the original policy remains unchanged, and the actual tax burden is still 20% and 10%. This policy adjustment will help further encourage long-term investment and promote the healthy development of China's capital market.

2. Will the dividends distributed by listed companies in the national small and medium-sized stock transfer system be implemented in accordance with the adjusted dividend differentiation policy?

Answer: In 2014, according to the relevant documents of the State Council, the Ministry of Finance, the State Administration of Taxation, and the China Securities Regulatory Commission issued the Notice on Issues Concerning the Implementation of the Individual Income Tax Policy for Differentiated Dividends and Dividends of Listed Companies in the National SME Share Transfer System (Finance & Tax [2014] 48 No.), dividends and dividends for listed companies in the national SME share transfer system shall be implemented in accordance with the differentiated tax policy for dividends of listed companies. For shares held within 1 month, from 1 month to 1 year, and for more than 1 year, the negative dividend income tax shall be: 20%, 10%, and 5%.

The Notice of the Ministry of Finance and the State Administration of Taxation of the State Administration of Taxation on Issues Concerning Dividend Dividends and Individual Income Tax Policies for Listed Companies (Caishui [2015] No. 101) stipulates that companies listed on the national SME share transfer system (hereinafter referred to as listed companies) ) The differentiated individual income tax policy for dividends and dividends is implemented in accordance with the provisions of this notice, that is, synchronized with the differentiated dividend dividend policy for listed companies. Individuals who hold shares of listed companies for more than one year are temporarily exempted from personal income tax. For shares within one month and between one month and one year, the tax burden remains unchanged from the original policy, which is still 20% and 10%.

3. How is the personal income tax payable for dividends received by individual investors calculated? How do listed companies withhold payment?

Answer: According to the Personal Income Tax Law and related regulations, the taxable amount of personal income tax is the taxable income multiplied by the applicable tax rate. The taxable income from dividends is the dividends actually received by investors. For example, if an investor receives a dividend of RMB 100, if the total amount is included in the taxable income, the taxable income is 100; if it is reduced by 50% into the taxable income, it is taxable. The amount of income is 50 yuan; the above taxable income is multiplied by the statutory tax rate of dividends 20%, and the resulting 20 yuan and 10 yuan are the taxable amount.

Listed companies are statutory withholding agents for individual income tax on dividends and dividends. When a listed company distributes dividends and dividends, if the individual shares are held for more than one year, the individual income tax will be temporarily exempted according to the policy. For individuals holding shares within 1 year (including 1 year), the listed company will not temporarily withhold personal income tax when paying dividends; when individuals transfer stocks, the securities registration and settlement company calculates the taxable amount based on the individual holding period. Securities companies, etc. The stock custodian institution deducts and transfers the securities registration and settlement company from the personal fund account. The securities registration and settlement company shall transfer the listed company within 5 working days of the following month. The listed company shall report to the supervisor within the statutory reporting period of the month in which the tax is received. Tax authorities declare and pay.

4. How is the holding period calculated?

Answer: According to the Notice of the Ministry of Finance and the State Administration of Taxation of the State Administration of Taxation on the Implementation of Dividend Dividends and Individual Income Tax Policies for Listed Companies (Caishui [2012] No. 85), the holding period refers to the period when an individual holds shares from the public offering and transfer The holding time from the date of obtaining the shares of the listed company to the day before the date of transfer of the shares. When an individual transfers shares, the holding period is calculated according to the FIFO method, that is, the shares acquired first in the securities account are deemed to be transferred first. The holding period is calculated according to the natural year (month). A year of holding refers to the continuous holding of shares from a certain day of the previous year to the day before the same day of the current year; a month of holding refers to the period from a certain day of the previous month to The previous day of the same day this month consecutively held shares.

5. What should the relevant departments do to implement the differentiated personal income tax policy for dividends and dividends?

Answer: The implementation of this policy covers a wide range and has a vital bearing on the vital interests of individual investors. All relevant departments should cooperate closely and work together to strengthen policy promotion and guidance, optimize taxation services, and provide technical support. Listed companies, securities registrars and securities companies, and other stock custodians should provide relevant technical support and personnel training, and actively cooperate with tax authorities in collecting and managing personal income tax on dividends and dividends to ensure the smooth implementation of policies. ^[1]