Foreign Individuals' Dividend Income Subject to 20% Individual Income Tax

The Ministry of Finance and the State Taxation Administration have issued an announcement stating that foreign individuals receiving dividend income from foreign-invested enterprises are required to pay individual income tax at a rate of 20% under the category of "interest, dividends, and bonus income." Foreign-invested enterprises must withhold and pay the tax when distributing dividends, and they are required to report and pay the tax by the 15th of the month following the payment. If withholding is not done, foreign individuals must pay the tax themselves by June 30 of the following year, and they should make up for any shortfall as notified by the tax authorities within the stipulated time. This announcement will take effect on September 1, 2026, and the relevant old regulations from 1994 will be abolished simultaneously.

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