On the 4th and 11th of July, 2017 the Cabinet of Ministers of Latvia approved a number of draft laws providing for the significant changes in the tax legislation of the country which will enter into force on January 1, 2018. The most significant of them will be the application of the CIT 0% rate for the reinvested profits. In other words, the enterprise will be subject to the corporate income tax only if it pays dividends or other payments for the purpose of actual distribution of the profits (conditionally distributed profit).
Therefore since 2018, the company's profits are exempted from CIT, but it has to pay 20% of the income tax from the amount of dividends. At the same time, the shareholders will not have to pay personal income tax (PIT). Although, according to the bill, the CIT rate is 20%, and the tax base should be divided by a factor of 0.8, the effective tax rate actually equals 25%. It is notably that CIT will be applied not only to the dividends in the traditional sense, but also to the "deemed dividends", which are considered a new concept in Latvian tax legislation, and comparable with the dividends to the costs. Here it is important to note that the last ones...
May 27, 2016 came into force The order payment of dividends by joint stock company, which is approved by the National Commission on securities and stock market from 12.04.2016 number 391.
In particular, on the relevant general meeting of shareholders is defined by a specific method of payment of dividends concerning the entire issue of shares - through the depository system of Ukraine or directly to shareholders.
Implementation of dividend payments by joint stock company is going through the payment of the entire amount in full or in part, certainly if it is provided by the general meeting of shareholders or the supervisory board of the company.
At the same time, in the case of decision-making by the joint stock company to pay dividends to shares, the payment could made proportionally and simultaneously to all persons who are entitled to receive dividends.
Regarding the payment of dividends directly to shareholders.
Payment of dividends to shareholders who are entitled, namely the transfer of the amounts of funds to all shareholders shall be effected by the transfer of funds to the shareholders during the relevant time and date that does not exceed six...
In this article, we propose to consider the main issues related to the payment of dividends to non-residents of Ukraine, that is, the individuals / juridical persons who are representatives of other states.
First of all, it should be noted that Ukrainian law provides the right of foreign investors to ensure they receive all the profits obtained in our country legally. This immediately indicates that the resident of Ukraine, being the actual issuer of corporate rights, who carries out the payment of dividends to non-residents, is subject to the general legislation on taxation. That means that regardless of the fact to whom the payment of dividends is made, the issuer is obliged to pay an advance fee of 25% without reducing the amount of dividends. International agreements related to the elimination or reduction of double taxation of income does not apply to this payment.
Now let's discuss in more details the payment of dividends to legal entities which are non-residents of Ukraine.
First of all, we emphasize that when paying dividends to non-resident, who is in fact a legal entity, but has no such status, the issuer of corporate rights is obliged to withdraw...