For any member of a business company or shareholder, one of the most important events is the receipt of dividends. This is an indicator that the funds invested in the investment object bring income. Dividends are the portion of profits distributed to investors that are taxable when paid. The profit is distributed after the approval of the annual financial statements by the shareholders.
It is necessary
shares of a domestic or foreign organization
Instructions
Step 1
Dividends received from a domestic or foreign organization are reflected in tax and accounting records in different ways. In accounting, dividends are operating income as income related to participation in the authorized capital of another organization. Based on the temporary assumption of certainty of the facts of economic activity, they should be reflected on the day of the decision on the payment of dividends on an accrual basis.
Step 2
In tax accounting, dividends should be included in the taxable base for income tax as non-operating income by the date of receipt of funds to the settlement account of the organization, regardless of the method of accounting for income and expenses applied by the taxpayer. When receiving income in the form of property from equity participation in organizations, the date of receipt is the day when the act of acceptance and transfer was signed.
Step 3
When receiving dividends from a foreign organization, the tax amount is determined by the taxpayer independently. The tax base includes the entire amount of dividends that are receivable, and whether the tax was withheld according to the legislation of that country does not matter. The amount of tax paid abroad cannot be higher than the amount of tax payable by a domestic organization. To confirm the payment of tax by a non-resident organization, confirmation of the tax authority of the state where the organization paying dividends is registered is required.
Step 4
The amount of dividends should be reflected in the period of receipt of funds to the account as part of non-operating income. Taxation of dividends is carried out not at the general rate, but at a special rate, therefore they should be excluded from the general tax base.
Step 5
In the event that the paying organization itself receives income from equity participation in another organization, the tax subject to withholding is calculated in a different manner. Then, from the total amount to be distributed, those dividends that are payable to the foreign organization are deducted. After that, the difference between the amount of calculations and the amount of dividends received by the tax agent for the current reporting period is calculated. If the difference turns out to be positive, then the obligation to pay tax is applied to it, and if the rate is negative, there is no obligation to pay tax.
