China ends foreign individuals' tax-free dividend exemption; 20% IIT now applies

MOF and the State Taxation Administration issued Announcement 2026 No. 27, repealing the 32-year-old exemption (Caishuizi 1994 No. 20) that let foreign individuals receive dividends from foreign-invested enterprises tax-free. Effective September 1, 2026, such dividends are subject to the standard 20% individual income tax withholding, with the FIE acting as withholding agent and remitting within 15 days of the following month. Hong Kong, Macao, and Taiwan resident shareholders are covered the same way; what governs old vs. new treatment is the actual payment date, not the distribution resolution date.