LLC dividends: calculation, taxation and payment to individuals
Summing up the results of the year, organizations prepare annual reports. If a profit is made during the tax period, it can be used to pay dividends to the Company's participants. In this article we will look at how to calculate dividends and personal income tax on them, and what documents and transactions to reflect these transactions.
When creating an LLC, the founders make contributions to the authorized capital and receive the right to receive a portion of the Company’s income according to their share. In the process of carrying out activities in the LLC, new participants may appear, who also have the right to a portion of the profits. Payment of income to the Company's participants in proportion to their shares in the authorized capital is made in the form of dividends (Clause 1 of Article of the Tax Code of the Russian Federation).
According to the Tax Code, the profit remaining after taxation is used to pay dividends. Profits can be distributed quarterly, once every six months or once a year (Article 28 of the Federal Law “On Limited Liability Companies” dated 02/08/1998 No. 14-FZ). The timing and procedure for paying dividends are prescribed in the charter of the LLC. In practice, it is more common to pay dividends at the end of the year.
There are a number of cases when an organization does not have the right to pay income to the founders. All exceptions are specified in Art. 29 of the Federal Law of 02/08/1998 No. 14-FZ.
The founders of an LLC can include both legal entities and individuals. Next we will talk about settlements with individual participants.
Profit distribution decision
At the general meeting of LLC participants, a decision is made to allocate retained earnings or part of it to pay dividends. Dividends can be paid both from the profit of the reporting year and from the profit of previous years. The results of the meeting are recorded in the minutes of the general meeting of participants (clause 6 of article 37
If the Company consists of one participant (sole founder), the decision to pay dividends is drawn up in any form (Article 39 of Federal Law No. 14-FZ).
Each participant in the company receives dividends according to their share in the authorized capital.
The protocol (decision) on the payment of dividends should indicate:
- for what period is profit distributed (last year, quarter, etc.);
- the amount of profit to be distributed;
- share of each participant (in% and rubles);
- timing of dividend payments;
- form of payment of dividends (money or property).
Participants can also indicate other clarifying information in the protocol. A detailed calculation procedure will help avoid controversial situations in the future.
Dividend calculation
Let's look at an example. Romashka LLC includes 3 founders. Shares among participants are distributed as follows:
Ivanov I.I. (organization employee) - 50%;
Sidorova A.A. (employee of the organization) - 22%;
Nosova E.E. (not an employee of the organization) - 28%.
Based on the results of the general meeting of founders, it was decided to pay dividends to all members of the Company from net profit, which amounts to 150,000 rubles.
Ivanov I.I. will receive dividends in the amount of 75,000 rubles (150,000 x 50%). Sidorova A.A. will receive dividends in the amount of 33,000 rubles (150,000 x 22%), and Nosova E.E. — 42,000 rubles (150,000 x 28%).
The accrual of dividends in accounting is reflected in the debit of account 84 “Retained earnings” and in the credit of accounts 70 (for employees of the Company) or 75 (for individuals who are not employees of the Company). Postings must be made on the day the decision to pay dividends is made (signing the protocol).
The accountant of Romashka LLC must make the following entries:
Debit 84 Credit 70 75 000 - dividends accrued to Ivanov I.I.;
Debit 84 Credit 70 33,000 - dividends accrued to Sidorova A.A.;
Debit 84 Credit 75 42,000 - dividends accrued to Nosova E.E.
Taxation
Organizations that pay dividends are recognized as tax agents. The responsibilities of tax agents include the complete and timely calculation, withholding and transfer of taxes (clause 3 of Art. Tax Code of the Russian Federation).
If an organization pays dividends to a legal entity, income tax must be calculated and the appropriate declaration must be submitted. When dividends are paid to individuals, there is no obligation to pay income tax. In this case, the Company must charge and withhold personal income tax from the participant’s income.
For resident individuals, the personal income tax rate on dividends is 13%; before 2015, the rate was 9% (Article of the Tax Code of the Russian Federation). Income in the form of dividends paid to individuals - non-residents of the Russian Federation, is taxed at a rate of 15%.
All income generated in favor of individuals is reflected in the 2-NDFL certificate. Since 2016, the tax withheld from dividends is also reflected in the calculation of 6-NDFL.
The Company should not show the amount of dividends paid to individuals as part of the income tax return (letter of the Ministry of Finance of the Russian Federation dated October 19, 2015 No. 03-03-06/1/59890).
Personal income tax on dividends must be transferred no later than the day of their actual payment (clause 6 of Art. Tax Code of the Russian Federation).
For successful companies that can boast of having net profit at the end of the year, the issue of paying dividends becomes relevant. The procedure for calculating and paying them is not easy in itself. Moreover, accountants will also be faced with the problem of taxation of such payments. After all, when calculating payments to the budget from dividends, you will have to suffer not only with determining the base, but also with the size of the tax base.
The decision to pay dividends relates exclusively to the powers of the general meeting of shareholders for joint stock companies (hereinafter - JSC) and the meeting of participants for limited liability companies (hereinafter - LLC). It should be taken into account that a decision on payment made by another management body of the company will be considered unlawful.
To recognize the validity of the accrual and payment of dividends, it is necessary that the organization meet certain requirements:
- there was a net profit at the end of the financial year;
- at the time of making the decision on payment, the authorized capital must be fully paid;
- the amount of net assets must be no less than the size of the registered authorized capital and reserve fund at the time of the decision and (or) subject to the actual payment of dividends;
- there must be no signs of insolvency (bankruptcy) at the time of the decision and (or) subject to the payment of dividends.
Dangerous moment
The total amount of dividends cannot be more than established by the meeting of shareholders (participants).
Thus, if all these requirements are met, then society has virtually no obstacles to making an appropriate decision.
It is worth noting that dividends can be paid not only at the end of the year. The legislation allows you to do this based on the results of the first quarter, half a year and 9 months. This is directly stated in paragraph 1 of Article 42 of the Federal Law of December 26, 1995 No. 208-FZ. However, this right is granted only to joint stock companies. Therefore, LLCs can only decide to pay at the end of the year.
For tax purposes, dividends are any income of a shareholder (participant) on shares (shares) owned by him, which are received from an organization during the distribution of net profit in proportion to the shareholder's (participant's) share in the authorized (joint) capital of this organization (clause 1 of Article 43 of the Tax Code of the Russian Federation ). In this case, net profit is the organization’s profit after tax. Dividends also include any income received from sources outside the Russian Federation, classified as such in accordance with the laws of foreign countries.
Dividends can also include payments to participants from retained earnings of previous periods, since neither civil nor tax legislation contains such a restriction (letter of the Ministry of Finance of Russia dated April 6, 2010 No. 03-03-06/1/235).
However, the following are not recognized as dividends:
- payments in an amount equal to the amount of the contribution (contribution) to the authorized capital that a shareholder (participant) receives upon liquidation of the organization;
- payments to the shareholder (participant), which the organization makes in the form of transfer of its shares into ownership;
- payments made by a business entity, consisting of contributions from a non-profit organization, for the implementation of the statutory activities of this non-profit organization.
From the above it follows that in order to recognize payments as dividends, the following conditions must be met:
- payments were made at the expense of the organization’s net profit;
- payments were made in proportion to the size of the participant's (shareholder's) share in the authorized capital of the organization.
However, for organizations formed in the form of an LLC, a special procedure for the distribution of income may be determined - not in proportion to the shares in the authorized capital of the company. This follows from paragraph 2 of Article 28 of the Federal Law of February 8, 1998 No. 14-FZ. It should be taken into account that that part of the distributed profit that is not proportional to the shares is not recognized as dividends and is taxed at the general rate of corporate income tax or personal income tax (letter of the Ministry of Finance of Russia dated June 24, 2008 No. 03-03-06 /1/366).
In addition, since 2011, dividends must be paid within the period specified in the decision of the meeting of shareholders (participants), but no later than 60 days from the date of adoption of the relevant decision, even if the company’s charter has not been amended and it provides for a longer period. When the deadline for paying dividends is not determined by the charter or by decision of the general meeting of shareholders (participants), it is considered equal to 60 days from the date of the decision to pay dividends.
Taxation of dividends
The procedure for taxation of dividends is regulated by Article 275 of the Tax Code.
When paying dividends, the company acts as a tax agent, that is, it fulfills their tax obligations for participants and shareholders. Tax agents are persons who are entrusted with the responsibility for calculating, withholding from the taxpayer and transferring taxes to the appropriate budget. In other words, taxes will be paid not by the income recipients themselves, but by the organization that pays them.
In practice, there are situations in which dividend recipients apply special tax regimes. As is known, such a group of taxpayers is not payers
It is important
Taxes must be transferred to the budget no later than the day following the day of payment of dividends.
corporate income tax and personal income tax. However, a special taxation procedure has been established for income in the form of dividends and it does not depend on the applicable taxation system. Consequently, the tax agent, regardless of the taxation regime applied by himself and the recipient of the income, must withhold and remit taxes.
To determine the amount of taxes to be transferred, the organization that is the source of dividends applies the formula:
N = K X СН X (d – D), Where
N– the amount of tax that is subject to withholding from the recipient of dividends;
TO– the ratio of the amount of dividends due to a specific recipient to the total amount of dividends paid;
Sn– the corresponding tax rate (the rates will be discussed separately);
d– the total amount of dividends to be paid to all recipients;
D– the amount of dividends received by the tax agent himself in the current and previous reporting (tax) periods (with the exception of dividends that are taxed at a rate of 0 percent), if previously these amounts were not included in the calculation of taxable income.
Initially, it may seem that calculating taxes using this formula will not cause difficulties. However, determining the values of indicators is not the easiest task. This is because there are many factors to consider.
Thus, when calculating indicators “K” and “d”, dividends that are distributed in favor of foreign organizations and individuals - non-residents of the Russian Federation are excluded from the latter. Also included in this indicator are those payments from which income tax is not withheld. This provision applies to cases of payment, for example, of dividends on shares owned by the state or municipality, as well as those constituting the property of mutual investment funds.
Regarding tax rates, it should be noted that when dividends are paid for previous tax periods, they are determined on the date of payment.
When determining the amount of dividends received by the organization itself - the source of payments (indicator “D”), the so-called “net” dividends are taken into account, that is, minus the income tax previously withheld from them. In addition, when calculating this indicator, dividends received not only from Russian organizations, but also from foreign ones are taken into account. The only exception will be income that was previously taken into account when paying dividends and is taxed at a rate of 0 percent.
The formula may result in a negative value when calculating the amount of tax to be withheld. This is possible if the indicator “d” is less than the indicator “D”, that is, the amount of dividends to be distributed is less than the dividends received by the company itself. In this case, the obligation to pay tax does not arise and compensation from the budget is not made.
Attention
Until January 1, 2010, indicators “d” and “K” included only those dividends that were subject to distribution in favor of taxpayers.
Tax rates
When paying dividends, the law provides for taxation at a preferential rate of 0 percent. Please note that this is only possible in relation to the calculation of corporate income tax. The application of the zero rate has some peculiarities, so certain conditions must be met.
Using a 0 percent rate is possible if the recipient of dividends on the day the decision on payment is made owns:
- contribution (shares) in the authorized (share) capital (fund) of the organization paying dividends in the amount of 50 percent or more;
- the continuous holding period is at least 365 calendar days.
On the one hand, these two conditions are quite simple. But regarding the calculation of a continuous 365-day period, disputes may arise when reorganizing a legal entity in the form of transformation. Such a reorganization involves a change in the organizational and legal form, for example, from a closed joint stock company to an open one, while the rights and obligations of the reorganized legal entity are transferred to the newly emerged legal entity. Thus, a new legal entity arises, whose ownership of the contribution (share) in the authorized (share) capital (fund) arises at the time of state registration. Consequently, the period of continuous ownership is recalculated from the moment of state registration of the new organization. A similar opinion was expressed in the letter of the Ministry of Finance of Russia dated November 1, 2011 No. 03-03-06/1/678.
However, it is worth noting that the fulfillment of obligations to pay for a reorganized legal entity is assigned to its legal successor, who enjoys all rights and fulfills all obligations (Clause 2 of Article 50 of the Tax Code of the Russian Federation). So, when determining the period of ownership of shares, you can make reference to this norm, but this carries with it some tax risks.
In addition, if the paying organization is foreign, then additional restrictions are established for the application of the 0 percent rate. The permanent location of such organizations should not be in offshore zones, where preferential tax regimes apply and the disclosure and provision of information when conducting financial transactions is not provided.
To confirm the right to a zero rate, the recipient of dividends must submit to the tax office information about the date of acquisition of ownership of the share (contribution) in the authorized (share) capital (fund) of the paying organization. It is also necessary to submit depositary receipts giving the right to receive dividends.
Regarding other rates for calculating taxes by agents, it should be noted that the application of a particular rate depends on the source of payment and on the recipients of income in the form of dividends. For ease of perception, you can display them in the form of a table.
Table. Applicable rates
Tax calculation
Russian organizations that pay dividends determine the amount of tax separately for each taxpayer in relation to each payment. At the same time, different rates apply to different categories of persons, as indicated in the table. The entire amount of taxes calculated by the agent is subject to credit to the federal budget.
In addition, the payment of dividends to individuals is carried out on the basis of the charter and the decision of the general meeting of the company's participants, that is, it is not a payment within the framework of labor relations or civil contracts, the subject of which is the performance of work or the provision of services. Consequently, insurance contributions to extra-budgetary funds are not charged.
Let's look at an example of how taxes are calculated in practice, taking into account the described features and categories of taxpayers.
Example
The Russian organization JSC Chemservice applies a general taxation system. The General Meeting of Shareholders decided to pay dividends to its shareholders in the total amount of 55,000,000 rubles based on the results of 2011. Dividends are distributed in proportion to their shares in the authorized capital of the company.
The shareholders of JSC Khimservice are:
– a foreign organization (Republic of Cyprus) Solis LTD, owns 10 percent of the shares. The dividends due to her are equal to RUB 5,500,000. (RUB 55,000,000 X 10%);
– the Russian organization Prompostavka LLC, which applies a simplified taxation system, owns 7 percent of the shares. The amount of dividends will be RUB 3,850,000. (RUB 55,000,000 X 7%);
– Russian organization Gamma LLC, owns 55 percent of the shares continuously for three years. The amount of dividends will be RUB 30,250,000. (RUB 55,000,000 X X 55%);
– Russian organization Diesel LLC, owns 12 percent of the shares. The amount of dividends will be 6,600,000 rubles. (RUB 55,000,000 X 12%);
– resident of the Russian Federation individual S.Yu. Belov owns 10 percent of the shares. The amount of dividends will be RUB 5,500,000. (RUB 55,000,000 X 10%);
– non-resident of the Russian Federation individual B.T. Duishembiev owns 3 percent of the shares. The amount of dividends will be 1,650,000 rubles. (RUB 55,000,000 X 3%);
The regional administration of a constituent entity of the Russian Federation owns 3 percent of the shares. Dividends will amount to RUB 1,650,000. (RUB 55,000,000 X 3%).
At the same time, Khimservice OJSC itself received 10,000,000 rubles from Sigma LLC before the decision was made to pay dividends. dividends, taking into account previously withheld corporate income tax.
Let's determine the amount of taxes to be transferred to the budget as a tax agent of Khimservice OJSC for each member of the company.
To calculate tax amounts, we will set the values of the indicators from the formula.
Amounts not included in determining indicator “d” are dividends from the foreign organization Solis LTD, non-resident of the Russian Federation B.T. Duishembiev and the Administration of the region of the constituent entity of the Russian Federation. Total RUB 8,800,000. (5,500,000 + 1,650,000 + 1,650,000).
Thus, the value of indicator “d” will be 46,200,000 rubles. (3,850,000 + 30,250,000 + 5,500,000 + 6,600,000). It consists of the amounts of dividends from Prompostavka LLC, Gamma LLC, S.Yu. Belova and Diesel LLC.
The resulting value of the “d” indicator will also be the denominator when determining the share of each participant (the “K” indicator).
The “K” indicator is defined as the ratio of dividends due to each shareholder to the total amount of dividends and is equal to:
– 0.083 for Prompostavka LLC (RUB 3,850,000: RUB 46,200,000);
– 0.655 for Gamma LLC (RUB 30,250,000: RUB 46,200,000);
– 0.119 for S.Yu. Belova (RUB 5,500,000: RUB 46,200,000);
– 0.143 for Diesel LLC (6,600,000 rubles: 46,200,000 rubles). The value of indicator “D” will be 10,000,000 rubles, since this is the amount of dividends received by OJSC “Chemservice” from LLC “Sigma”.
Since all the values of the indicators are known, we will determine the amount of taxes to be withheld for each participant.
- Solis LTD. By virtue of the agreement between the Government of the Russian Federation and the Government of the Republic of Cyprus dated December 5, 1998 “On the avoidance of double taxation with respect to taxes on income and capital,” these dividends are taxed at a rate of 10 percent. Therefore, the amount of tax withheld will be RUB 550,000. (RUB 5,500,000 X 10%). The amount of dividends transferred to Solis LTD will be RUB 4,950,000. (5,500,000 – 450,000).
- Dividends of a foreign citizen B.T. Duishembiev are taxed at a rate of 15 percent. The amount of withheld tax on personal income is 247,500 rubles. (RUB 1,650,000 X 15%). “Net” dividends will amount to RUB 1,402,500. (1,650,000 – 247,500).
- For S.Yu. Belova's organization must transfer to the budget personal income tax in the amount of 387,702 rubles. (0.119 X 9% X (46,200,000 – 10,000,000)). Dividends after tax will amount to RUB 5,112,298. (5,500,000 – 387,702).
- For Prompostavka LLC, the amount of corporate income tax withheld is RUB 270,414. (0.083 X X 9% X (46,200,000 – 10,000,000)). The amount of dividends is RUB 3,579,586. (3,850,000 – 270,414).
- For Diesel LLC, the amount of corporate income tax withheld is RUB 465,894. (0.143 x 9% X X (46,200,000 – 10,000,000)). The amount of dividends is RUB 6,134,106. (6,600,000 – 465,894).
- Dividends received by Gamma LLC are subject to taxation at a rate of 0 percent, therefore, no corporate income tax is withheld. Their amount will be 30,250,000 rubles.
- Dividends due to the Regional Administration are also not subject to taxation.
Accounting
The direction of profit for the payment of dividends (income from equity participation) is reflected in the accounting records as of the date the general meeting of the company's participants makes a decision on the distribution of net profit.
In this case, an entry is made to the debit of account 84 “Retained earnings (uncovered loss)” in correspondence with the credit of account 75 “Settlements with founders” (subaccount 75/2 “Settlements for payment of income”) or with the credit of account 70 “Settlements with personnel for payment labor" (if the recipient of the income is an employee of the organization).
If the organization that is the source of payment of dividends (income from equity participation) must withhold and transfer income tax and (or) personal income tax to the budget, then the tax withholding is reflected in the debit of account 75 (subaccount 75-2) or account 70 in correspondence with the credit of account 68 "Calculations for taxes and fees."
Thus, when the recipient is a legal entity, individual entrepreneur or individual who is not an employee of the organization, the following entries are made:
Debit 84 Credit 75/2
Debit 75/2 Credit 68
– income tax or personal income tax is withheld;
Debit 75/2 Credit 50 or 51
– dividends paid minus withholding tax.
If the recipient of the dividends is an employee of the organization, then the accounting entries will look like this:
Debit 84 Credit 70
– the debt to the founder for the payment of dividends distributed in his favor is reflected;
Debit 70 Credit 68
– personal income tax withheld;
Debit 70 Credit 50 or 51
– dividends were paid minus withheld personal income tax.
D. Nacharkin, expert editor
Dividends are the profit that the owners of a company receive as a result of its effective operation. 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. The general formula for calculating taxes on dividends is provided in 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 receivables of the founders for unpaid contributions to the authorized capital or payment for shares are subtracted from the total assets of the organization.
As for liabilities, they must be reduced by the amount of future income received as government assistance 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
Income is recognized for tax purposes as dividends if they are paid(Clause 1 of Article 43 of the Tax Code of the Russian Federation):
At the expense of the net (remaining after taxation (Clause 83 of the Regulations on Accounting and Accounting Reports in the Russian Federation)) profit of 2010 or at the expense of retained earnings of any previous years (Clause 2 of Article 42 of Law No. 208-FZ; clause 1 Article 28 of Law No. 14-FZ);
Proportional to the shares of participants in the authorized capital (Clause 1, 3 of Article 42 of Law No. 208-FZ; Clause 2 of Article 28 of Law No. 14-FZ);
Subject to distribution and payment restrictions. In particular, on the day the decision was made by the general meeting, the value of the company’s net assets should not be less than its authorized capital and reserve fund (Article 43 of Law No. 208-FZ; Article 29 of Law No. 14-FZ).
If payments do not meet the listed conditions, then these are no longer dividends, which means they must be taxed at regular (higher) tax rates. For example, disputes with tax authorities arise when distributing profits in an LLC disproportionately to the shares of participants (this may be provided for by the company’s charter) (Letters of the Ministry of Finance of Russia dated June 24, 2008 N 03-03-06/1/366, dated January 30, 2006 N 03-03- 04/1/65), as well as in cases where the value of net assets as of the date is less than the authorized capital (Resolution of the FAS ZSO dated 08.20.2009 N F04-3970/2009(9950-A45-27); FAS VSO dated 09.14.2010 in case No. A19-24816/09).
Taxation of dividends
Dividends- always income taxed either (regardless of the applied taxation regime) or (Clause 2 of Article 214, paragraph 2 of Article 275, paragraph 3 of Article 346.1, paragraph 2 of Article 346.11, paragraph 4 of Article 346.26 of the Tax Code RF). Moreover, if dividends are paid by a Russian organization, then the recipients themselves do not calculate or pay taxes. This is done for them by the company - the source of payment as a tax agent (even if it is a special regime agent) (Clause 1 of Article 226, paragraph 2 of Article 275, paragraph 4 of Article 346.1, paragraph 5 of Article 346.11, paragraph 4 of Art. 346.26 Tax Code of the Russian Federation).
The procedure for calculating income tax and personal income tax on dividends depends on who the recipient is - a Russian or foreign participant.
Calculation of taxes on dividends of Russian participants
When paying dividends to Russian companies and individuals - residents of the Russian Federation, you need to remember that two tax taxes can be applied to income in the form of dividends: income tax rates - 0 and 9%, and by There is only one personal income tax - 9%.
We apply a zero income tax rate
A 0% rate can be applied to dividends paid for 2010 if the participating company for at least 365 consecutive calendar days owns a share that is at least half of the authorized capital of the company - the source of payment (Subclause 1, clause 3, Article 284 of the Tax Code of the Russian Federation) .
If you pay dividends for earlier years (2009 and 2008 (Clause 3, Article 1, Article 2 of the Federal Law of May 16, 2007 N 76-FZ)), then they will be taxed at a zero rate only if they are also complied with one condition - the participant spent at least 500 million rubles on acquiring a share in the authorized capital of your company. (Part 2 of Article 5 of the Federal Law of December 27, 2009 N 368-FZ).
Attention! A zero income tax rate can be applied to dividends paid to organizations for 2009 and 2008 only if the cost of acquiring a share by a participant is RUB 500 million. and more.
Note
To confirm the right to a 0% rate, participating organizations must submit to the inspectorate at their location documents indicating the date of their acquisition of shares in the authorized capital of the source of payment (purchase and sale agreements, prospectuses, transfer deeds, extracts from personal accounts of the register of shareholders etc.) (Clause 3 of Article 284 of the Tax Code of the Russian Federation). The deadline for submitting such documents has not been established, so the participant can submit them together with the income tax return, which reflects the dividends received (Letter of the Ministry of Finance of Russia dated February 24, 2009 N 03-03-06/1/78). And if he does not submit them, the tax authorities will still request them during a desk audit of his declaration (Clause 6 of Article 88 of the Tax Code of the Russian Federation).
We calculate “dividend” taxes at a rate of 9%
You calculate the income tax and personal income tax on dividends of Russian participants at a rate of 9% using the formula (Clause 2 of Article 214, paragraph 2 of Article 275, paragraph 2 of paragraph 3 of Article 284 of the Tax Code of the Russian Federation; paragraph 11.2 of the Procedure for filling out a tax return for corporate income tax, approved by Order of the Federal Tax Service of Russia dated December 15, 2010 N ММВ-7-3/730@ (hereinafter referred to as the Procedure)):
In indicator “d” you include the amount of dividends accrued in favor of absolutely all Russian participants, even if they are public entities (state, regions, municipalities) or participants entitled to a zero rate on income tax.
And when determining the value of the “D” indicator, you:
Do not take into account the amount of dividends received, taxed at a rate of 0%;
Take into account the amounts of dividends that were not previously included in this calculation and were received in 2010 and 2011 (before the date of the decision of the general meeting of participants on the payment of dividends on which the tax is calculated).
You take the dividends received into account in the amount received, that is, minus the income tax withheld from you (Clause 11.2 of the Procedure; Letter of the Federal Tax Service of Russia dated June 10, 2010 N ШС-37-3/3881).
For reference
Tax residents of the Russian Federation - individuals who are in Russia for at least 183 calendar days during the 12 months preceding the day of payment of dividends (Clause 2 of Article 207, paragraph 1 of paragraph 1 of Article 223 of the Tax Code of the Russian Federation; Letter of the Ministry of Finance of Russia dated July 23, 2007 N 03-04-06-01/258).
As you can see, if the company - the source of the payment itself did not receive dividends, then it is much easier to calculate the amount of tax - you just need to multiply the amount of dividends paid to the participant by the tax rate.
Note
When calculating personal income tax on dividends to citizens - residents of the Russian Federation, remember:
- the amount of dividends is not reduced by tax deductions, since they apply only to income taxed at a rate of 13% (Clause 4 of Article 210 of the Tax Code of the Russian Federation);
- if the participant is an entrepreneur, this does not affect the taxation of dividends. Citizens participate in the authorized capital of business companies as ordinary individuals, and not as entrepreneurs (Clause 4 of Article 66 of the Civil Code of the Russian Federation; Letter of the Ministry of Finance of Russia dated July 13, 2007 N 03-04-06-01/238).
Calculation of taxes on dividends of foreign participants
When paying dividends to participants - foreign companies and individuals who are non-residents of the Russian Federation, you calculate the withholding tax (whether personal income tax or income tax) as follows (Clause 2 of Article 214, paragraph 3 of Article 224, paragraph 3 of Article 275 , paragraph 3, paragraph 3, article 284 of the Tax Code of the Russian Federation):
Amount of tax withheld from dividends paid to a foreign participant = Amount of dividends paid to a foreign participant x 15%
Keep in mind that a foreign participant may be a resident of a state with which the Russian Federation has an agreement on the avoidance of double taxation, providing for a reduced or zero tax rate. Then dividends are taxed at the rate provided for by this agreement (Article 7, paragraph 4, paragraph 2, paragraph 3, Article 310 of the Tax Code of the Russian Federation). But only if the participant, before paying him dividends, provides you with an official document confirming his residence (Clause 2 of Article 232, paragraph 1 of Article 312 of the Tax Code of the Russian Federation). For example, reduced rates established for residents of the following countries:
Moldova - 10% (Clause 2 of Article 10 of the Agreement between the Government of the Russian Federation and the Government of the Republic of Moldova dated April 12, 1996);
Kyrgyzstan - 10% (only for individuals) (Clause 2 of Article 10 of the Agreement between the Government of the Russian Federation and the Government of the Kyrgyz Republic of January 13, 1999);
Ukraine - 5% (if the value of the share is not less than 50 thousand US dollars) (Clause 2 of Article 10 of the Agreement between the Government of the Russian Federation and the Government of Ukraine dated 02/08/1995).
Example . Calculation of taxes on dividends and filling out income tax returns
Condition
LLC participants (two Russian companies: OJSC with a share of 51% and CJSC with a share of 19%; an Austrian company with a share of 20% (share value 5.5 million rubles); a citizen - tax resident of the Russian Federation with a share of 10%) accepted 03/01/2011 decision to distribute among themselves the net profit of the LLC for 2010 in the amount of 5 million rubles. in proportion to their shares in the authorized capital. Dividends were paid to all participants on March 18, 2011. The composition of participants and the size of their shares have not changed over the past year. An Austrian company is entitled to a reduced income tax rate - 5%, since the size of its share is more than 10%, the value of the share is more than 100 thousand US dollars and it has presented a document confirming its permanent location, certified by the competent authority of Austria (Federal Minister of Finance ) (Subparagraph "i" of paragraph 1 of Article 3, paragraph 2 of Article 10 of the Convention between the Government of the Russian Federation and the Government of the Republic of Austria of April 13, 2000). The LLC itself received dividends in the amount of 100 thousand rubles in 2010.
Solution
We calculate taxes and fill out section. And sheet 03 of the income tax return on dividends paid to Russian participants.
Step 1. We calculate the amount of dividends due to each participant.
Amount of dividends of OJSC = 5,000,000 rubles. x 51% = 2,550,000 rub.
Amount of dividends of the closed joint stock company = 5,000,000 rubles. x 19% = 950,000 rub.
Amount of dividends for an individual = RUB 5,000,000. x 10% = 500,000 rub.
Amount of dividends of a foreign company = 5,000,000 rubles. x 20% = 1,000,000 rub.
Step 2. We calculate the “d” indicator from the formula for calculating “dividend” taxes at a rate of 9%(amount of dividends payable to Russian participants):
"d" = 5,000,000 rub. - 1,000,000 rub. = 4,000,000 rub.
Step 3. We calculate the difference between indicators “d” and “D” from the formula for calculating “dividend” taxes at a rate of 9%:
"d" - "D" = 4,000,000 rubles. - 100,000 rub. = 3,900,000 rub.
Step 4. We calculate the tax withheld from the income of each participant.
Amount of income tax from JSC = 0 rub. (share more than 50%, share ownership period more than 1 year).
Amount of income tax from CJSC = 950,000 rubles. / 4,000,000 rub. x 9% x RUB 3,900,000 = 83,362.50 rub.
Amount of personal income tax for an individual = 500,000 rubles. / 4,000,000 rub. x 9% x RUB 3,900,000 = 43,875 rub.
Amount of income tax from a foreign company = 1,000,000 rubles. x 5% = 50,000 rub.
Step 5. We calculate the amount payable to each participant minus withholding tax.
Amount payable to OJSC = RUB 2,550,000.
Amount to be paid by the CJSC = RUB 950,000. - 83,362.50 rub. = 866,637.50 rub.
Amount to be paid to an individual = RUB 500,000. - 43,875 rub. = 456,125 rub.
Amount payable to a foreign company = RUB 1,000,000. - 50,000 rub. = 950,000 rub.
Step 6. We fill out section. And sheet 03 of the income tax return for the first quarter of 2011.
Note
The tax calculated on dividends paid to individuals and foreign companies is not reflected in the income tax return (Clause 11.2 of the Procedure).
Procedure for paying "dividend" taxes and submitting reports
Deadlines for payment of income tax and personal income tax on dividends, as well as the procedure for submitting reports We will present them in the form of a table.
|
Recipient |
Payment deadline |
Submission deadline |
View |
|
Not later: |
Help for |
||
|
Russian |
No later than one day |
During the reporting period (month, |
Tax |
|
Foreign |
No later than one day |
For dividends paid |
Tax |
Note
Special regimes that pay dividends only to individuals do not submit an income tax return (Letter of the Federal Tax Service of Russia dated May 24, 2010 N ShS-21-3/289@).
Accounting for dividends at source
In accounting you accrue dividends on the date the general meeting of participants made a decision on their payment (Clause 1, Article 9 of the Federal Law of November 21, 1996 N 129-FZ “On Accounting”; Instructions for the use of the Chart of Accounts for accounting financial and economic activities of organizations, approved. Order of the Ministry of Finance of Russia dated October 31, 2000 N 94n).
And on the date of payment of dividends you make the following entries (Instructions for using the Chart of Accounts).
|
Tax withheld from |
75-2 "Calculations for payment |
68, subaccount "NDFL", |
|
Dividends paid |
75-2 "Calculations for payment |
50 "Cashier", |
|
Withholding tax |
68, subaccount "NDFL", |
51 "Current accounts" |
Note
For tax purposes (regardless of the regime), accrued and paid dividends are not taken into account in expenses (Clause 1 of Article 270, paragraph 2 of Article 346.5, paragraph 1 of Article 346.16 of the Tax Code of the Russian Federation).
As you can see, the procedure for calculating taxes on dividends this year has not changed compared to last year, except that the conditions for applying the zero rate on income tax have been simplified.
A dividend is any income received by a shareholder (participant) of an organization when distributing profits that remain after taxation (including in the form of interest on preferred shares) on shares (shares) owned by the shareholder (participant) in proportion to the shares of shareholders (participants) in the charter ( share capital of this organization. Dividends also include any income received from sources outside the Russian Federation, which are classified as dividends in accordance with the laws of foreign states (clause 1 of Article 43 of the Tax Code of the Russian Federation).
The procedure for paying dividends by joint stock companies is established in Chapter V “Company Dividends” of the Federal Law of December 26, 1995 No. 208-FZ “On Joint Stock Companies”.
Federal Law No. 14-FZ of February 8, 1998 “On Limited Liability Companies” does not contain such a concept as a dividend. However, in Art. 28 of this Law provides that the company has the right to decide on the distribution of its net profit among its participants. Part of the profit intended for distribution among the company's participants is distributed in proportion to their shares in the company's authorized capital.
In addition, the letter of the Ministry of Finance of Russia dated May 14, 2015 No. 03-03-10/27550 clarified that for the purposes of applying the Tax Code of the Russian Federation, dividends as such include not only income received by a shareholder from an organization when distributing profits remaining after taxation , on shares owned by the shareholder, but also similar income received by a participant in a limited liability company on shares owned by him.
Tax rates on dividend income
Tax rates of 0, 13 and 15% are applied to the tax base determined by income in the form of dividends (clause 3 of Article 284 of the Tax Code of the Russian Federation).Income in the form of dividends received by Russian organizations in accordance with paragraphs. 1 clause 3 art. 284 of the Tax Code of the Russian Federation are subject to income tax at a tax rate of 0%, provided that on the day the decision to pay dividends is made, the organization receiving dividends has continuously owned, for at least 365 calendar days, no less than a 50% contribution (shares) in the charter ( share capital (fund) of the organization paying dividends or depositary receipts giving the right to receive dividends in an amount corresponding to at least 50% of the total amount of dividends paid by the organization.
According to the opinion of the Ministry of Finance of Russia, set out in, if on the day the decision on the payment of dividends is made, the requirements of paragraphs. 1 clause 3 art. 284 of the Tax Code of the Russian Federation, then a tax rate of 0% is applied to all income received by the organization in the form of dividends, including dividends from additionally acquired shares that increase the company’s share of ownership in the authorized capital above the minimum value established by the named subclause.
When determining the 365-day period of holding a deposit (share) for the purposes of applying a 0% tax rate, the period of ownership of the deposit (share) by the transformed organization may be taken into account, provided that before the reorganization this organization met the criteria established by paragraphs. 1 clause 3 art. 284 of the Tax Code of the Russian Federation (letters of the Ministry of Finance of Russia dated 03/20/15 No. 03-03-06/1/15521, dated 01/30/15 No. 03-03-06/1/3656).
The tax rate specified in paragraphs. 1 clause 3 art. 284 of the Tax Code of the Russian Federation does not apply to income received by foreign organizations that are recognized as tax residents of the Russian Federation in the manner established by Art. 246.2 of the Tax Code of the Russian Federation, with the exception of foreign organizations that independently recognized themselves as tax residents of the Russian Federation in the manner provided for in paragraph 8 of Art. 246.2 Tax Code of the Russian Federation.
