The Northern District National Taxation Bureau of the Ministry of Finance stated that in order to simplify the reporting procedures for operators who also engage in investment business, the dividend income they obtain during the year may be temporarily exempted from being included in the current period's tax-free sales declaration. At the end of the year, the dividend income for the entire year will be summarized and added to the tax-free sales declaration for the last period of the year to calculate the tax payable or overpaid amount.
The bureau explained that the dividend income obtained by business operators, including domestic and foreign cash dividends and stock dividends (excluding the capital reserve conversion and allotment portion), should be aggregated and incorporated into the last tax-free sales of the current year, and the adjusted tax amount should be calculated based on the proportion of input tax that cannot be deducted from output tax in the current year (hereinafter referred to as the non-deductible proportion) in accordance with the business tax calculation method for concurrent operators, and paid together.
The bureau added that when calculating the amount of tax that cannot be deducted for the proportional adjustment for the current period or year, business operators may choose to use the proportional deduction method or the direct deduction method, which is summarized in the attached table.
The bureau stated that out of compassion for tax administration and to protect the rights of taxpayers, the National Tax Bureau has proactively sent letters of guidance and reminders to business operators who have not completed annual dividend income declaration and adjustment in 2013, or whose declaration cases have not been finalized and who wish to apply for a change in deduction method, to review themselves and automatically submit supplemental reports and pay additional taxes to the tax authorities under their jurisdiction or apply for a change in deduction method before August 9, 2014, to avoid damage to their own rights. If you have any questions, please contact the nearest local tax bureau or call the toll-free service number 0800-000321. Our colleagues will serve you wholeheartedly.
Contact person for press release: Sales Tax Division Chief Zheng Contact number: (03) 3396789 ext. 1260
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