As of Sept 1, 2026, foreign individuals receiving dividends and bonuses from foreign-invested enterprises in China are subject to individual income tax at a rate of 20 percent under the "income from interest, dividends or bonuses" category, according to a new policy jointly issued by the Ministry of Finance and the State Taxation Administration.

How will the tax be paid?

The foreign-invested enterprise paying dividends or bonuses is responsible for withholding and paying the tax. It must file the tax return and pay the tax by the 15th day of the month following the month in which the income is paid.

If the enterprise does not withhold the tax, the foreign individual receiving dividends or bonuses must pay the tax by June 30 of the following year.

If the tax authority sets a payment deadline, the individual must pay the tax within that period.

When did the policy take effect?

The new policy took effect on Sept 1, 2026. At the same time, the relevant provision of a 1994 notice by the Ministry of Finance and State Taxation Administration on individual income tax policy was repealed.

Sources: Ministry of Finance, State Taxation Administration, VCG