Under MOF and STA Announcement 2026 No. 27, effective September 1, 2026, dividends and bonuses that foreign individuals receive from foreign-invested enterprises (FIEs) are now taxed at the standard 20 percent individual income tax rate under 'interest, dividend and bonus income', ending an exemption in place since 1994. The FIE acts as withholding agent and must file within 15 days of the following month; the relief previously extended to Hong Kong, Macao, and Taiwan residents is also withdrawn.
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China ends 32-year dividend tax exemption for foreign individuals from Sept 1
Why this matters for founders
Foreign founders drawing dividends from a China WFOE or JV should remodel after-tax returns, set up withholding and foreign-shareholder registers, and check whether a tax-treaty reduced rate applies (subject to beneficial-ownership tests) before the next distribution.
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