Ministry of Finance and State Administration of Taxation: Foreign individuals pay personal tax at 20% on foreign-funded enterprise dividends

The Zhitong Finance App learned that on September 1, the Ministry of Finance and the State Administration of Taxation issued the “Notice Concerning Matters Relating to the Personal Income Tax Policy on Dividends for Foreign Individuals”, which clearly states that the dividend dividend income earned by foreign individuals from foreign-invested enterprises shall pay personal income tax according to “income from interest, dividends, and dividends”, and a 20% tax rate will be applied. When foreign-invested enterprises pay dividends to foreign individuals, they shall withhold and pay taxes on their behalf and file tax returns within 15 days of the month following payment of the income. Where a foreign-invested enterprise has not withheld taxes, the foreign individual receiving the dividend dividend shall pay the tax before June 30 of the year following the receipt of the income; if the tax authorities notify the payment deadline, the foreign individual shall pay the tax according to the deadline. The new regulations will come into effect on September 1, 2026.

The original text is as follows:

Notice on matters relating to the personal income tax policy on dividends and dividends for foreign individuals

Ministry of Finance and State Administration of Taxation Notice 2026 No. 27　　

The announcement on matters relating to the personal income tax policy on dividends for foreign individuals is as follows:

1. Foreign individuals pay personal income tax on dividend income earned from foreign-invested enterprises according to “income from interest, dividends, and dividends”, and a 20% tax rate is applied.

2. When foreign-invested enterprises pay dividends to foreign individuals, they shall withhold and pay taxes on their behalf and file tax returns within 15 days of the month following the payment of the income. If a foreign-invested enterprise has not withheld taxes, the foreign individual receiving the dividend dividend shall pay the tax before June 30 of the year following the receipt of the income; if the tax authorities notify the payment deadline, the foreign individual shall pay the tax according to the deadline.

3. This notice came into effect on September 1, 2026, and Article 2 (8) of the “Notice of the Ministry of Finance and the State Administration of Taxation on Certain Personal Income Tax Policy Issues” (Finance and Taxation Letter (1994) No. 20) was abolished at the same time.

We hereby announce it.

Ministry of Finance and General Administration of Taxation

September 1, 2026

This article was selected from the official website of the “Department of Taxation and Administration of the Ministry of Finance”. Zhitong Finance Editor: Xu Wenqiang.