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Calculation of taxes when dividends are taken from the profits of previous periods
Calculation of taxes when dividends are taken from the profits of previous periods
Tax experts comment on the topic. According to Article 122.1 of the Tax Code, the dividend paid by the resident enterprise is taxed at the source of payment at the rate of 5 percent. The provisions of that article, which were in force until January 1, 2024, provided for a tax of 10 percent at the source of payment from the dividend.
Dividends paid after January 1, 2024 are taxed at the source of payment at the rate of 5 percent.
Example: The net profit of "AA" LLC for 2022-2023 was 4,000,000 manats. The company announces this information in 2024 and announces the decision to pay a dividend of AZN 3,000,000 to the founder. In this case, since the dividend income obtained by the founder was declared in 2024, the object of taxation is related to this year. Therefore, the company will deduct 5% tax from the source of payment on that amount.
This situation is also reflected in the legislation. According to the provisions of Article 12 of the Tax Code, the taxation base and period coincides with 2024.
Dividend income: 3,000,000 manats;
Tax at the source of payment: 3,000,000 x 5% = 150,000 manats;
The amount to be paid to the founder: 3,000,000 – 150,000 = 2,850,000 manats.
Tax experts comment on the topic. According to Article 122.1 of the Tax Code, the dividend paid by the resident enterprise is taxed at the source of payment at the rate of 5 percent. The provisions of that article, which were in force until January 1, 2024, provided for a tax of 10 percent at the source of payment from the dividend.
Dividends paid after January 1, 2024 are taxed at the source of payment at the rate of 5 percent.
Example: The net profit of "AA" LLC for 2022-2023 was 4,000,000 manats. The company announces this information in 2024 and announces the decision to pay a dividend of AZN 3,000,000 to the founder. In this case, since the dividend income obtained by the founder was declared in 2024, the object of taxation is related to this year. Therefore, the company will deduct 5% tax from the source of payment on that amount.
This situation is also reflected in the legislation. According to the provisions of Article 12 of the Tax Code, the taxation base and period coincides with 2024.
Dividend income: 3,000,000 manats;
Tax at the source of payment: 3,000,000 x 5% = 150,000 manats;
The amount to be paid to the founder: 3,000,000 – 150,000 = 2,850,000 manats.