What is the difference in income tax policy between dividends obtained by individuals and enterprises?

The differences in income tax policies between individuals and enterprises on income from dividends are as follows:

First, the specific tax object and scope are different. The object of enterprise tax collection is the income or profits of legal persons or other organizations; The tax object is the personal income of residents and non-residents.

Second, the tax rate is different. Corporate tax is subject to the proportional tax rate of 25%, preferential tax rate of 20% (small-scale low-profit enterprises), 15% (high-tech enterprises); Individual tax has an excessive progressive tax rate (from 5% to 45%) and a proportional tax rate (20%).

Third, the preferential policies for reduction and exemption are different. The total tax revenue of an enterprise includes tax-free income, tax-free income, tax exemption or reduction in five situations, such as engaging in agriculture, forestry, animal husbandry and fishery, and various forms of preferential treatment, such as additional deduction, income reduction, accelerated depreciation, tax credit and special preferential treatment.

Individual tax exemption items include bonuses for science, education, culture and health issued by provincial governments, ministries and commissions of the State Council and units above the corps level of the People's Liberation Army, interest on national treasury bonds and financial bonds issued by the state, and income of 10 uniformly distributed by the state.

Four, the calculation of pre-tax deduction and income is different. The public welfare donation expenses incurred by enterprise tax shall be deducted according to the method that the total annual profit is less than 12%; Personal income tax deduction includes donations to education and other public welfare undertakings and additional deductions for expenses.

Fifth, the collection methods are different. Collecting enterprise tax by means of audit or verification; In the form of tax collection, there are forms of monitoring collection such as withholding and personal declaration.

References:

Baidu Encyclopedia-People's Republic of China (PRC) Enterprise Income Tax Law

Baidu Encyclopedia-People's Republic of China (PRC) Individual Income Tax Law