Recently, three authorities including the Ministry of Finance ("MOF") have jointly issued the Announcement on the Continued Implementation of the Differential Individual Income Tax Policies for Dividends and Bonuses of Companies Listed on the National Equities Exchange and Quotations (the "Announcement"), which is effective from July 1, 2019 to June 30, 2024.
According to the Announcement, if an individual holds shares of a listed company for a period of more than one year, his or her dividend and bonus income shall be temporarily exempt from individual income tax (IIT). If an individual holds shares of a listed company for a period of less than one month (inclusive), his or her dividend and bonus income shall be fully included in the taxable income; and if the shareholding period is more than one month and less than one year (inclusive), 50% of his or her dividend and bonus income shall be temporarily be included in the taxable income; the above mentioned income shall be subject to IIT at a uniform tax rate of 20%.