Tax treatment of dividends after shareholding and guidelines for the payment of personal income tax

In the field of equity investmentGameswiftcryptoDividend is one of the important issues concerned by shareholders. The tax treatment of dividends and the payment of personal income tax are particularly important for investors. This article will analyze in detail the tax treatment of dividends after investing in shares, and answer the question of whether it is necessary to pay personal income tax.

I. tax treatment of dividends after shareholding

Dividend after shareholding usually refers to the distribution of profits according to the proportion of shareholders' shares after the company has made a profit. Tax treatment is mainly divided into two kinds: cash dividend and stock dividend.

oneGameswiftcrypto. Cash Dividend

Cash dividend means that a company pays profits to shareholders in the form of cash. The tax treatment of cash dividend is mainly based on the relevant provisions of the Enterprise income tax Law and the personal income tax Law.

For corporate shareholders, cash dividends need to pay corporate income tax. The tax rate of enterprise income tax is 25%, but under certain conditions, it can enjoy preferential tax policies. For example, dividend income between residents and enterprises is exempt from corporate income tax.GameswiftcryptoThe tax rate on dividends of non-resident enterprises is 10%.

For individual shareholders, cash dividends need to pay personal income tax. According to the personal income tax Act, dividend income is taxed at 20%. In practice, however, cash dividends for individual shareholders are usually taxed at 10 per cent.

twoGameswiftcrypto. Stock dividend

Stock dividend means that a company pays profits to shareholders in the form of newly issued shares. The tax treatment of stock dividend involves enterprise income tax and individual income tax.

For corporate shareholders, stock dividends need to pay corporate income tax. The tax rate of enterprise income tax is 25%, but under certain conditions, it can enjoy preferential tax policies. For example, stock dividends between resident enterprises are exempted from corporate income tax; non-resident corporate stock dividends are taxed at 10%.

For individual shareholders, stock dividends need to pay personal income tax. According to the personal income tax Act, stock dividends are taxed at 20%. In practice, however, individual shareholders' stock dividends are usually taxed at 5%.

Second, whether it is necessary to pay individual income tax on dividends after investing in shares

According to the provisions of the personal income tax Law, the dividend income of individual shareholders is required to pay individual income tax. However, in practice, the dividend income tax rate of individual shareholders will be reduced. The specific tax rates are as follows:

It should be noted that the specific tax rate of personal income tax may be affected by the adjustment of national tax policy, so in the actual operation, it is recommended to consult professional tax personnel.

To sum up, the tax treatment of dividends after buying shares is mainly divided into cash dividends and stock dividends, which are related to corporate income tax and individual income tax respectively. Individual shareholders need to pay personal income tax when paying dividends, but the applicable tax rate is relatively low. When investing in equity, investors should fully understand the relevant tax policies and make reasonable arrangements for investment plans.