By Tan Thai Soon
Section 4(c)
Dividend income received is chargeable under the Income Tax Act.
Comment:-
1) Under Imputation System
1.1. Dividend received under imputation system, tax paid by companies are not final tax.Tax paid by companies are passed on to shareholders as tax credit (S110).
1.2. Where shareholders received dividends have been tax deducted as source (e.g.25%) and received a net dividend (e.g. 75%)
1.3.Tax payer is require to declare gross dividend income (100%) in the income tax return. If the Tax payer is in the lower tax bracket (e.g.19%), then the tax payer is entitle for a refund of 6%. On the other hand, if the tax payer is in the tax bracket of 27%, the tax payer is require to pay 2% additional tax on the gross dividend received.
2) Under Single Tier System
2.1. Dividend received under Single Tier System.
2.2. Tax paid (e.g.25%) by companies is final tax. The dividend income (100%) received by shareholders are tax exemption.
2.3. Tax payer is not required to declare the dividend income in the tax return.
4 comments:
Dr, for a director of a company that received director's fee, are they allowed to received at nett, to avoid double tax expenses upon return.
What if REITs, which 10% tax is imposed to the dividend receiver. Do we need to declare?
YA. REAL ESTATE DIVIDEN WHICH IS 10% WITHOLDING TAX. IF THE BRACKET LET SAY 24% R WE GONNA TO PAY ANOTHER 12%?
Are Dividends from AmanahRaya Trust Accounts taxable
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