In the article we will consider the tax on dividends for both individuals and legal entities. Dividends are income representing a part of net profit, paid to the participants of the company in proportion to the funds invested in its authorized capital (AC). The participant can be a legal entity or a specific citizen.
Payment of dividends to persons participating in the formation of the company's management company is made either at the end of the year based on the calculated annual net profit, or in several payments during the year. The amount of income received is influenced by the share of contribution of each specific participant in the company’s capital.
The deadlines for paying profits to the founders are prescribed in the company's charter or in the decision to issue dividends. If the two specified documents do not stipulate specific deadlines for payment, then according to Law No. 14-FZ, they must be issued within sixty days from the date on which the decision to issue them was made. IN in this case we mean calendar days.
Joint-stock companies must make payments within 25 days (working days) from the moment the list of persons for issuing dividends is determined. The specific time frame within the established limit is determined by the AO in its decision.
The JSC is liable for violation of these terms:
- 500,000–700,000 rub. – for society itself;
- 20,000–30,000 rub. - for its leader.
For other companies, liability is not specified.
What taxes are received dividends subject to?
VAT
Recipients of dividends do not need to pay additional tax on the amount of income; this statement applies to both legal entities and individuals. This is due to the lack of presentation of tax for payment by the company distributing income between participants.
Income tax
Provided for companies that pay dividends to legal entities. Moreover, the procedure for transferring tax to the budget is influenced by the fact of the subject’s relationship to foreign or Russian persons.
Russian companies independently calculate and transfer tax on the amount of dividends paid. Foreign companies do not perform such actions. Organizations receiving profits from foreign legal entities must themselves calculate the tax payable and remit it.
Personal income tax
Dividends received by individual participants, including persons who formed individual entrepreneurs, are subject to income tax. The citizen himself does not need to take any action. The company distributing profits independently calculates the tax, withholds it and transfers it to the budget, issuing dividends to the participant without personal income tax.
Dividend tax for legal entities
From dividends intended for organizations participating in the formation of the management company, income tax must be withheld and transferred to the budget to the source of payment. Moreover, “simplified people” should do this too.
The amount of dividends received is taken into account by legal entities among non-operating income. Dividends are recognized as income on the day the money is received into the company's account, and the method of income recognition used (cash or accrual) is not important. Dividends received by the organization do not participate in the formation of the base for calculating income tax, since it has already been calculated and paid by the tax agent.
The responsibility for calculating and withholding tax falls on the person who is the source of payments.. This statement is true for Russian organizations paying dividends.
The dividend amounts should be reflected in the income statement - the values are entered in field 100 of the 1st appendix to the 2nd sheet, as well as in field 020 of the 2nd sheet. Further, this type of income is reflected as excluded in field 070 of the 2nd sheet.
If a foreign company distributes its profit, then the participant, who is a legal entity, must independently calculate the amount of tax on the profit received and send it to the budget according to the appropriate BCC.
The deadline for payment is the next day after the transfer of dividend funds to the recipient.
There are two rates when calculating tax on profits that take the form of dividends.
These rates apply to both Russian and foreign sources of payment. There is one caveat regarding the zero rate - foreign companies should not belong to offshore zones, otherwise a rate of 13% should be applied.
Calculation example
The authorized capital of Antey LLC was formed by two participants:
- Magnat LLC – its share is 70%, share ownership period is 3 years;
- Trans LLC – share is 30%.
Amounts of accrued dividends:
- LLC "Magnat" - 2,450,000 rubles;
- LLC "Trans" - 1,050,000 rubles.
- LLC "Magnat" - withholding income tax is not required, since this participant owns more than half of the capital of LLC "Antey" for more than one year (rate 0%), the entire amount of calculated dividends is subject to payment - 2,450,000 rubles;
- LLC "Trans" - tax should be withheld 1,050,000 * 13% = 136,500 rubles, amount payable = 1,050,000 - 136,500 = 913,500 rubles.
If profits are not distributed in proportion to the share of participation
As a rule, the amount of accrued dividends is directly proportional to the size of the share in the capital of the company. In some situations, a different order of profit distribution is possible - not proportional to the share.
If such a situation arises, the source of dividends calculates the income tax as 13% of the entire accrued amount and transfers it to the required BCC. If the amount of dividends calculated with a disproportionate distribution of profits turns out to be greater than it would be with a traditional proportional distribution, then the excess amount that arises is subject to taxation at a higher rate - 20%. Therefore, a company that has received income needs to pay additional taxes taking into account the increased rate.
Dividend tax for individuals
An organization that transfers dividends to individual participants must calculate personal income tax and transfer it to the budget. Individuals participating in the formation of the management company of the company should pay dividends without taking into account income tax. The company must calculate the amount of tax before dividends are transferred to the participant.
Personal income tax is calculated taking into account the established rate on the entire accrued amount of dividends, while deductions of various types are not taken into account. If dividends are issued to participants more than once a year, then personal income tax should be calculated separately for each payment.
A company that issues dividends to its founders must include the amounts of the transferred part of the profit in the 2-NDFL certificate. If this company is a joint stock company, then the dividends issued and the personal income tax on them must be recorded in the profit declaration.
From the beginning of 2016, the amount of dividends and personal income tax calculated from them should also be included in 6-personal income tax, and these amounts are indicated in separate lines, separated from the total amount of income paid to a given individual.
Dividend tax rates
In relation to personal income tax calculated from an individual’s receipts in the form of dividends, the following rates should be used:
The specified percentage is taken from the entire amount of income paid.
The 13% rate applies to income paid from the beginning of 2015. Before this, a different rate was in effect - 9%.
The calculated personal income tax must be transferred no later than the next day after the date of issue Money an individual. If the company is a joint stock company, the deadline for payment increases to one month.
Calculation example
Antey LLC in May 2016 accrued to the participant individual Koshkin A.A. dividends in the total amount of 1,150,000 rubles.
On the day of payment of this type of income, you need to calculate personal income tax = 1,150,000 * 13% = 149,500 rubles. and transfer it to the budget no later than the next day.
Koshkin was transferred the amount minus income tax = 1,150,000 – 149,500 = 1,000,500 rubles.
Dividends are the profit that the owners of a company receive as a result of its efficient work. However, as with any income, taxes must be paid on dividends. Let's look at how to calculate income tax on dividends.
Concept of dividends
In taxation, dividends mean the income that the owner of a legal entity receives when distributing the resulting profit. For example, in a joint-stock company dividends are paid to participants, and in an LLC, profits are usually distributed among the founders according to the available shares. Profit is paid to both individuals and legal entities. But now they have the obligation to pay taxes: for individuals - personal income tax, and for legal entities - income tax.
Tax rates on dividends of legal entities and individuals
| Participant | Income tax | Personal income tax |
|---|---|---|
| Russian organizations that have a share of 50% or more in the authorized capital of an LLC paying dividends for a period of at least 365 calendar days before the decision to pay dividends is made | 0% | - |
| All other Russian organizations | 13% | - |
| Foreign organizations | 15% or the rate provided for by international agreements | - |
| Residents of the Russian Federation | - | 13% |
| Non-residents of the Russian Federation | - | 15% |
Personal income tax
Until 2015, if a citizen received a profit, the income tax on dividends from individuals was calculated at a rate of nine percent. Now the rate is higher and is 13 percent. The amount of mandatory tax is withheld by the organization that pays the dividends.
It turns out that since 2015, the dividend rate has been equal to the “salary” rate, although income tax is not subject to contributions to insurance funds, since it is outside the scope of labor legislation. General formula To calculate taxes on dividends, clause 5 of Art. 275 Tax Code of the Russian Federation. With its help, both personal income tax and income tax are calculated (letter of the Ministry of Finance of the Russian Federation dated June 17, 2015 No. 03-04-06/34935).
When is a tax deduction not applied?
Personal income tax reporting
According to the Tax Code (clause 4 of Article 230), persons who are recognized as tax agents in accordance with the Tax Code of the Russian Federation (Article 226.1) are required to submit information to the territorial department of the tax inspectorate:
Information is transmitted in the order and within the time limits specified in Art. 289 Tax Code.
It should be noted that such tax agents are not subject to the general procedure for transferring information on the profits of individuals to the Federal Tax Service by providing a certificate of income of individuals.
The income tax return form is now in effect. It is filled in when tax agents have to pay dividends. The declaration form was approved by a letter from the Federal Tax Service of Russia dated 02/05/2015.
Income tax
As mentioned earlier, the tax base for dividends is determined in accordance with Art. 275 Tax Code of the Russian Federation. Income tax is withheld at a rate of 13% on the day of payment of dividends, directly by the organization that issues them. It is worth noting that a legal entity must transfer tax to the budget no later than the day following the payment of dividends.
If the income is received from a foreign organization, then the calculation and payment of tax lies on the shoulders of the domestic organization. If the payment is made by a Russian organization, then it is the organization that is obliged to withhold and pay tax for the recipient company.
Tax agent responsibilities exist for Russian companies regardless of the taxation regime.
Calculation of net assets
By law, dividends cannot be distributed, for example, if the company’s net assets have become less than the authorized capital. To do this, you need to know how to calculate these “net assets”.
The procedure for determining the value of net assets was approved by Order of the Ministry of Finance of the Russian Federation No. 84n dated August 28, 2014 and is binding on both JSCs and LLCs.
The value of net assets represents the book value of everything that will exist at the disposal of the founders of the organization if they pay off every single obligation; this value is determined on the basis of accounting data.
When calculating, the total assets of the organization are subtracted accounts receivable founders for unpaid contributions to the authorized capital or payment for shares.
As for liabilities, they must be reduced by the amount of deferred income received as state aid or as property transferred free of charge.
How to calculate tax on dividends
Let's look at how the calculations are carried out.
Example 1
The authorized capital of Alpha LLC consists of equal shares of three investors. In May 2016, the LLC paid its founders P.S. Ivanov and S.I. Petrov. – Russian citizens, and Sidorchuk I.P. – to a non-resident of the Russian Federation, a citizen of Ukraine, dividends. Each - in the amount of 300,000.00 rubles.
When paying them, personal income tax is withheld. From Russians - 39,000.00 rubles. (300,000 x 13%); each of the Russian participants received 261,000.00 rubles. (300,000 – 39,000).
The personal income tax withheld from a citizen of Ukraine amounted to 45,000.00 rubles. (300,000 x 15%), and payment to Sidorchuk I.P. amounted to 255,000.00 rubles. (300,000–45,000).
The next day after the payments to the founders, Alpha LLC transferred the withheld personal income tax in the amount of RUB 123,000.00. to the budget (39,000+39,000+45,000).
Example 2
Beta LLC in 2016 decided to pay dividends for 2015 in the amount of RUB 1,000,000.00. to its investors: Gamma LLC (60% of the authorized capital), Delta LLC (30%), resident of the Russian Federation P.S. Ivanov. (7%) and non-resident of the Russian Federation Ukrainian Sidorchuk I.P. (3%).
Beta LLC owns shares in the authorized capitals of:
- Epsilon LLC – 100%; Beta LLC owns this share for three years: 2014, 2015 and 2016, that is, dividend income will be taxed at a rate of 0%.
- Zeta LLC – 40%, that is, dividend income will be taxed at a rate of 13%.
In 2015, Beta LLC received dividends from Epsilon LLC in the amount of RUB 1,500,000.00. and from Zeta LLC - in the amount of RUB 500,000.00. These dividends were not taken into account when calculating the tax base for dividends paid by Beta LLC to its participants in 2015. At the end of 2015, Beta LLC distributed profit in the amount of RUB 1,000,000.00 among its participants. in the following order:
- Ivanov P.S. and Sidorchuk I.P. RUB 70,000.00 each and 30,000.00 rub. respectively;
- Gamma LLC – RUB 600,000.00;
- Delta LLC – RUB 300,000.00.
Dividends were paid in May 2016. Personal income tax and income tax on them are calculated as follows:
- In Sidorchuk I.P. Personal income tax amounted to RUB 4,500.00. (30,000 x 15%), payment to Sidorchuk I.P. amounted to RUB 25,500.00. (30,000 – 4,500).
- Ivanov P.S. Personal income tax is calculated according to the following rule: if the company that issues dividends makes a profit in another organization, then personal income tax must be calculated using the formula: personal income tax = 13% x (Div - Div1) x Div2/Div, where:
- Personal income tax is the calculated tax of an individual resident of the Russian Federation;
- Div – the amount of profit to be distributed (in our example, 1,000,000.00 rubles);
- Div1 – the amount of dividends received (this includes profits received from third parties, including for previous periods, but not included in the calculation of tax), minus income received by Russian organizations in the form of dividends, provided that on the day of the decision on the payment of dividends, the organization receiving dividends for at least 365 calendar days continuously owns by right of ownership at least 50 percent of the authorized capital of the organization paying dividends or depositary receipts giving the right to receive dividends in an amount corresponding to at least 50 percent of the total the amount of dividends paid by the organization (RUB 500,000.00 - income from Zeta LLC);
- Div2 – share (dividends) of an individual – a resident of the Russian Federation (RUB 70,000.00).
So, personal income tax on dividends from Ivanov P.S. amounted to RUB 4,550.00. (70,000/1,000,000 x 13% x (1,000,000 – 500,000); Ivanov will receive 65,450.00 rubles (70,000.00 – 4,550).
- Dividends received from Gamma LLC are not taken into account when calculating the deduction, since they are subject to income tax at a rate of 0%.
- The income tax on dividends of Delta LLC, withheld by the tax agent of Beta LLC, will amount to RUB 195,00.00. (300,000/1,000,000 x 13% x (1,000,000 – 500,000). The participant receives 280,500 rubles (300,000 – 19,500).
How to determine the total amount of personal income tax taking into account dividends: Video
Tax on dividends- how to calculate it? This question may arise for a company when paying income to participants. In our article we will tell you how taxes on dividends are calculated correctly.
Whose responsibility is the taxation of dividends?
The taxpayer for dividend income is the recipient. This can be either an organization or an individual. In the first case, income tax is paid on dividends, in the second - personal income tax. However, the direct responsibility to calculate, withhold and pay taxes on dividends lies with the company that distributes profits and pays dividends, since in this situation it acts as a tax agent (clause 3 of Article 275 of the Tax Code of the Russian Federation).
NOTE!The responsibilities of a dividend tax agent also arise if the organization that is the source of the payment applies special regimes (STS, UTII or Unified Agricultural Tax). And for a recipient of dividends working under a special regime, the use of this regime does not prevent them from receiving dividends minus tax on them.
Read more about the responsibilities of special regime officers regarding dividend tax in the article .
Algorithm for calculating tax on dividends
The formula by which taxes on dividends are calculated is given in paragraph 5 of Art. 275 of the Tax Code of the Russian Federation and has the following form:
N = K × Sn × (D1 - D2),
N - amount of tax on dividends to be withheld;
K is the ratio of the amount of dividends to be distributed in favor of their recipient to the total amount of dividends distributed by the organization;
Сн - tax rate;
D1 - the total amount of dividends distributed in favor of all recipients;
D2 - the total amount of dividends received by the organization itself in the current and previous reporting (tax) periods, provided that they were not previously taken into account when calculating income; This figure does not include dividends, which are subject to a zero income tax rate.
NOTE!This formula is used to calculate both income tax on dividends paid to organizations and personal income tax on dividends in favor of individuals (clause 2 of Article 210 of the Tax Code of the Russian Federation, letter of the Ministry of Finance of Russia dated June 17, 2015 No. 03-04-06/34935).
However, it is not used when calculating taxes on dividends in favor of foreign companies and individuals - non-residents of the Russian Federation. For them, taxes are calculated based on the full total amount of dividends distributed by the organization (clause 6 of Article 275 of the Tax Code of the Russian Federation). If the final recipients of such a payment are individuals or legal entities who are residents of the Russian Federation, then the prohibition on using the above formula does not apply to payments to non-residents.
Nuances of calculating taxes on dividends
When calculating tax on dividends, it is important to consider the following features:
- The total amount of distributed dividends (in the formula this is indicator D1 and the denominator of indicator K) includes, among other things, dividends in favor of:
- foreign companies;
- “physicists” - non-residents of the Russian Federation.
This follows directly from paragraph 5 of Art. 275 of the Tax Code of the Russian Federation (as well as from letters of the Ministry of Finance of Russia dated July 8, 2014 No. 03-08-05/33030 and the Federal Tax Service of Russia dated August 12, 2014 No. GD-4-3/15833@).
- The total amount of dividends should include those from which the “profitable” tax is not withheld (paragraph 6, paragraph 5, article 275 of the Tax Code of the Russian Federation). In particular, dividends on shares that are state or municipally owned or that constitute the property of mutual funds and public legal entities (letter of the Ministry of Finance of Russia dated June 11, 2014 No. 03-08-05/28295).
- Dividends for past periods are taxed at the rate established on the date of issue of these dividends (letter of the Federal Tax Service of Russia for Moscow dated March 14, 2007 No. 20-08/022130@).
- Indicator D2 takes into account dividends (not counting those taxed at a zero rate) received from both domestic and foreign companies. Moreover, they are taken into account in the so-called pure form, that is, without the tax that the source of payment withheld from them (letter of the Ministry of Finance of Russia dated June 11, 2014 No. 03-08-05/28295).
- If the calculation results in a negative tax amount, then the agent does not need to pay tax. But he won’t be able to get the difference from the budget. This is directly stated in paragraph. 9 clause 5 art. 275 Tax Code of the Russian Federation.
- An organization paying dividends through tax agents must notify about the values of indicators D1 and D2 used in the calculation no later than 5 days from the date of determining the circle of persons entitled to receive dividends (if the organization is the issuer), but no later than the day of their payment each of the tax agents. Notification is carried out by sending information electronically or on paper or posting it on the website or in a payment document for the transfer of money (clauses 5.1 and 5.2 of Article 275 of the Tax Code of the Russian Federation).
The personal income tax rate depends on the status of the individual receiving the income (Article 224 of the Tax Code of the Russian Federation):
- For a resident of the Russian Federation, dividend tax is withheld at a rate of 13%;
- non-resident - at a rate of 15%.
Read more about calculating income tax on dividends in the material .
NOTE!You can transfer personal income tax withheld from dividends of several “physics” participants in one payment.
For the tax on dividends of foreign companies, a tax calculation (information) is provided on the amounts of income paid to foreign organizations and taxes withheld. Its form was approved by order of the Federal Tax Service of Russia dated March 2, 2016 No. ММВ-7-3/115@.
The deadlines for submitting a profit declaration and tax calculations coincide (Clause 4, Article 310 of the Tax Code of the Russian Federation). Their last date is defined as the 28th calendar day from the end of the reporting period (clause 3 of Article 289, clause 2 of Article 285 of the Tax Code of the Russian Federation), and for the annual report - as March 28 of the next year (clause 4 of Article 289, Clause 4 of Article 310 of the Tax Code of the Russian Federation).
Read more about the timing of profit reporting in the article .
Dividends paid to individuals are reflected in 2-NDFL certificates, annually submitted to the Federal Tax Service and handed over to the individual (clauses 2, 4 of Article 230 of the Tax Code of the Russian Federation). If information on the payment of income is submitted by a tax agent recognized as such under Art. 226.1 of the Tax Code of the Russian Federation (transactions with securities, derivative financial instruments, payments on securities of Russian issuers), and this agent submitted to the Federal Tax Service data on payments made as part of the profit declaration submitted by him (in Appendix 2 to it), then certificates 2- He does not need to submit personal income tax to the Federal Tax Service (clause 4 of Article 230 of the Tax Code of the Russian Federation, letter of the Federal Tax Service of Russia dated 02.02.2015 No. BS-4-11/1443@).
For reporting in Form 2-NDFL, see the article .
Results
The tax on dividends is transferred to the budget by the legal entity paying them, withholding the amount of tax from the amounts accrued for payment. To calculate the amount of tax on payments to residents of the Russian Federation, a special formula is used that allows you to reduce the distributed amount of dividends by the amount received by the distributing person in a similar quality. When determining the amount of tax on payments to non-residents, such a reduction is not made. The rates applied to dividends paid to residents (13%) and non-residents (15%) also differ. Information about payments made is included in the profit declaration (for legal entities always, and for individuals if the tax agent is recognized as such under Article 226.1 of the Tax Code of the Russian Federation) and in 2-NDFL certificates (for individuals, if information about payments is not submitted in the declaration).
Dividends are considered to be those profits that remain unaffected after paying all necessary taxes. By law, these funds must be distributed among shareholders. Like any income, they are subject to contributions to the regional budget for both individuals and legal entities. In case of non-payment of the mandatory contribution, a fine of 20% their total amount.
In 2019 do not apply to dividends:
- return of founding fees after the company is declared bankrupt
- return of bank deposits
- re-registration and transfer of shares and securities of the company into hands
In other cases, profit is considered eligible for taxation. The frequency of payments depends on the decision made by the company’s shareholders at the general meeting: once a year, six months or quarter. To avoid various disputes, the amount of transfers must be proportional to the shares of the founders in the authorized capital.
The profit of each participant is calculated using the formula:
A * B = C, where
A– profit margin, B– size of share in the authorized capital, C- Part total number dividends that will be paid to the founder
Since the contribution rate for this type of income is low, a disproportionate distribution of payments may be recognized as another type of income, which will entail an increase in the rate.
The amount of payment in Russia is calculated differently for legal entities and individuals.
Taxation for 2019
Even if an enterprise has chosen the simplified taxation system (STS), this does not exempt it from tax contributions on net profit. Thus, an amount equal to personal income tax (13%) is withheld from an individual, and income tax is withheld from a legal entity (from 0 to 15%). Let's take a closer look at the difference.
Transfers on behalf of an individual must be made to the budget dividend distribution company. Essentially, an organization is a tax agent for a person who receives profit from a business.
In some cases, profit is paid not in cash, but in the form of goods or property that the company produces. The company's management submits an application to tax authority that it is not possible to withhold personal income tax from an individual receiving income from a business. Then the required contribution is paid directly by the recipient.
The amount for individuals is calculated based on the status of the recipient - it can be.
A resident is considered a business participant who has spent time in the country 183 days behind Last year. It does not matter whether the required number of days was formed in a row or in parts. By the way, according to Article 207 of the Tax Code of the Russian Federation, days that the recipient of the profit spent in other countries for a “valid” reason are not taken into account - because necessary treatment, studying at an educational institution, due to illness or death of close relatives, and so on.
An individual is recognized as a non-resident if the participant has spent less than 180 days.
Interestingly, country status can be obtained by a person who does not have Russian citizenship; the only important thing is the time he spent on the territory of the Russian Federation.
Business income tax for individuals is:
- 13% - for residents of the country
- 15% - for non-residents
Payments for profit significantly influence the volume of regional budgets. That is why the tax amount increased from the recent 9% to 13%.
Regulates taxation standards for legal entities (LLC) that have received profit from business. According to the law, a special role here is played by the fact whether the organization is Russian or foreign.
For example, if one Russian company has at least a 50% share in the capital of the source company, then the tax amount in this case will be 0%
. However, the right not to pay a profit contribution must be documented:
- purchase and sale agreement or exchange agreement
- a copy of the decision on division, allocation or transformation of shares
- judicial acts
- acts of transfer of shares
- agreement on establishment
In other cases, the amount of income tax is calculated based on the tax regime and status chosen when opening a company:
- organization based in Russia – 13% from the amount of income;
- foreign agent organization – from 15% .
A foreign organization can pay tax at a different rate if it is provided for by an international agreement that avoids double payment of the contribution.
Legal entities that have chosen the so-called special regimes - simplified system (STS), Unified Agricultural Tax or UTII - have certain advantages. For example, they are exempt from tax on their own dividends received from their company. But if they simultaneously hold shares in the authorized capital of another organization, then there are certain exceptions.
Thus, according to Article 346 of the Tax Code of the Russian Federation, organizations operating under a special taxation regime are not exempt from mandatory payments for income from third-party business.
Companies with UTII pay tax only if the income is received from certain types of activities:
- domestic services;
- veterinary services;
- car repair, maintenance and car washing services;
- paid parking lots;
- passenger transportation services;
- shops, catering establishments, pavilions with a hall for visitors with an area of no more than 150 square meters;
- distribution, creation and placement of outdoor advertising;
- others (according to the list given in Article 346.36 of the Tax Code of the Russian Federation).
In other words, taxes are paid on behalf of individuals by the organization that is the source of dividends, if we are talking about a financial equivalent. In this case, individuals pay their own contributions if the profit is received in the form of property.
If profit in the form of property was received in 2019, personal income tax must be paid before July 15, 2020.
If we talk about legal entities, they are exempt from paying taxes on their own profits, but must pay taxes on third-party profits. All the subtleties of this issue are regulated by Article 346 of the Tax Code of the Russian Federation.
hundred vka
Conventionally, the dividend tax rate can be divided into the following components:
- 13% – for individual residents of the Russian Federation receiving income from business;
- 15% – for non-resident individuals of the Russian Federation;
- 13% – for legal entities, Russian organizations;
- 15% (or another rate under an interstate contract) - for foreign enterprises;
- 0% – for organizations owning 50% of the authorized capital in the source of income.
Explains how the amount of taxes on dividends is calculated for individuals and legal entities - residents of the Russian Federation and operating in the Russian Federation, respectively. The calculation is made using the formula:
H = K * Sn * (D1 – D2), where
N– the total amount of tax withheld from profits, K– the ratio of the amount of profit that is distributed in favor of a specific participant and the amount of total profit, Sn– the size of the tax rate, D1– the full amount of business income that must be distributed among shareholders or founders, D 2– the value of the entire amount of the enterprise’s independent income (useful if it was not previously taken into account in the calculation of profit).
KD2 does not include dividends that require a zero rate of the required tax contribution (for example, on profit received from the organization itself).
This formula will work to calculate taxes on dividends that individuals and legal entities will receive in 2019.
conclusions
Thus, the amount of tax on net profit received by organizations is determined based on the status of the participant in the distribution - it can be an individual or legal entity, a resident or non-resident of Russia, receiving income from business.
The frequency of payments of profit shares is determined at the general meeting of shareholders or founders of the enterprise that receives dividends. Final calculations and reporting for transactions are carried out according to the formulas given in Articles 275 and 346 of the Tax Code of the Russian Federation.
Failure to pay tax results in a fine for both individuals and legal entities. Its size is at least 20% of the total amount of income due to the participant.
How to calculate, pay and withhold taxes on dividends? Details are in this video.
The payment of dividends to LLCs in 2019 is subject to the procedure approved by the legislation of the Russian Federation. How to correctly determine the amount of dividends, distribute them among participants and show them in reporting will be discussed in today’s article.
Source of LLC dividends
Dividends (or income from the use of net profit) are income the receipt of which is available to LLC participants (Clause 1, Article 28 of the Law “On LLC” dated 02/08/1998 No. 14-FZ). Accordingly, to issue such income, it is necessary, first of all, to have net profit. It is determined according to accounting data (letter of the Ministry of Finance of the Russian Federation dated September 20, 2010 No. 03-11-06/2/147).
The LLC has the opportunity to choose the frequency of dividend payments to the founders: quarterly, half-yearly or annually - depending on the amount of net profit for each of these periods. Considering that profit is considered an accrual total for the year, its final amount will be known at the end of the tax period, and only then will it be possible to establish the final amount of income possible for payment. Therefore, in order to avoid situations where dividends paid during the year exceed the permissible amount for the year, it is better to distribute them at the end of the year based on the results of the approved annual accounting reports.
What is needed to pay dividends?
The rules for paying dividends to LLC founders in 2019 are still based on the restrictions contained in Art. 29 of Law No. 14-FZ and requiring:
- full payment of the management company;
- full payment of his share to the retiring participant;
- excess of net assets over the amount of the capital and reserve fund, including after the issuance of dividends;
- absence of signs of bankruptcy, including after the issuance of dividends.
Compliance with these restrictions must occur both at the date the disbursement order arises and at the time the income is paid. If the decision has already been made, and at the time of issuance the conditions are such that they do not allow payment, then it will be made after these conditions disappear (clause 2 of Article 29 of Law No. 14-FZ).
The decision regarding payments is made by the participants themselves, convening a general meeting. It is carried out no earlier than accounting reports have been compiled for the corresponding period, allowing one to judge compliance with the restrictions established by law. Annual reporting must be approved. The meeting at which this is done is convened no earlier than March 1 and no later than April 30 of the year following it (Article 34 of Law No. 14-FZ). The issue of dividend distribution is usually timed to coincide with this meeting.
The fact of holding a meeting is documented in a protocol drawn up in the form accepted by the LLC, which must contain the following information regarding dividends:
- an indication of the year for which they want to pay income to participants;
- amount allocated for dividends;
- form of issuance and payment period.
It is permissible in the protocol to indicate a single amount intended for payment, since in an LLC the procedure according to which dividends are distributed is either reflected in the charter or is the result of a division in proportion to shares (clause 2 of Article 28 of Law No. 14-FZ ).
The form of issuance, in addition to monetary, can be property. However, the issuance of property is equivalent to the sale (letter of the Ministry of Finance of the Russian Federation dated 02/07/2018 No. 03-05-05-01/7294, dated 08/25/2017 No. 03-03-06/1/54596, dated 12/17/2009 No. 03-11-09 /405) and will be very unprofitable from a tax point of view. Therefore, cash payments are preferred.
Dividend distribution
If there is a single founder, the issue of distribution does not arise. He receives the entire amount allocated for payment purposes.
If there are several participants, the distribution will most often be proportional to the share of the contribution to the management company. The amount of dividends per person is determined by multiplying the total amount allocated for distribution by the percentage reflecting the share of participation.
If the distribution does not correspond to the proportion or algorithm established by the charter, then in relation to payments to individuals this may lead to disputes with extra-budgetary funds, which are not accrued on the amount of legally paid dividends. And the amounts in excess will be considered ordinary income, for which these accruals are required.
Dividend payment procedure
As before, the actual payment of dividends in 2019 is carried out with tax withholding. They are applied regardless of the year for which the accrual occurs, to payments made in 2019:
- Personal income tax for individuals - 13% (clause 1 of Article 224 of the Tax Code of the Russian Federation) for citizens of the Russian Federation and 15% (clause 3 of Article 224 of the Tax Code of the Russian Federation) for foreigners;
- income tax for legal entities - 13% (subclause 2, clause 3, article 284 of the Tax Code of the Russian Federation) for Russian companies and 15% (subclause 3, clause 3, article 284 of the Tax Code of the Russian Federation) for foreign legal entities.
For situations where dividends are issued to a legal entity that has owned more than a 50% stake in the capital company for at least a year, a 0% rate can be applied (subclause 1, clause 3, article 284 of the Tax Code of the Russian Federation).
The question of taxation of dividends issued to a legal entity arises even for an LLC whose tax regime exempts it from ordinary payments on profits.
If the LLC issuing dividends is also the recipient, then the basis for determining the tax accrued on payments to resident participants can be reduced. To do this, the total amount of dividends received is subtracted from the total amount of profits allocated for distribution. Then the difference must be multiplied by the share of participation and the tax rate (clause 2 of Article 214 and clause 2 of Article 275 of the Tax Code of the Russian Federation). This calculation procedure is not applicable for legal entities and foreign citizens.
Read more about calculating tax on dividends in the following articles:
- “How to correctly calculate the tax on dividends?” ;
- “Features of calculating dividends for determining income tax”;
- “The procedure for calculating dividends under the simplified tax system.”
Payment of taxes is carried out no later than the 1st working day following the day of payment, regardless of who the dividends are paid to: submitted to the Federal Tax Service on a quarterly basis no later than last day the month following the reporting quarter and (by year) until April 1 of the year following the reporting quarter;
Read more about entering data on dividends in Form 6-NDFL in the material “How to correctly reflect dividends in form 6-NDFL?” .
- for profit - in the form of a declaration, which, in addition to the title page, includes subsection 1.3 of section 1 and sheet 03, submitted to the Federal Tax Service within the deadlines established for such reporting: interim - before the 28th day of the month following the reporting period, final (for the year) - until March 28 of the following year.
Results
The procedure for paying dividends to founders in 2019 has not changed. Before deciding to pay dividends, it is necessary to check whether restrictions are violated that would make payment impossible. Taxation of dividend payment transactions depends on the form of their payment, the period of ownership of shares in the authorized capital, whether the LLC received dividends from other companies, and whether the recipient of the dividends is a Russian or foreign organization/individual.