China Repeals Foreign Dividend Tax Exemption Starting September 2026

Overseas residents holding shares in foreign-invested enterprises in China face a new dividend tax. Starting September 1, 2026, dividend distributions will be taxed at 20%. This change impacts cross-border wealth management for overseas Chinese in Denmark and Sweden.

China's Ministry of Finance and State Taxation Administration published Announcement 2026 No. 27. The document repeals a 32-year-old individual income tax exemption. The exemption previously covered dividends and bonuses received from foreign-invested enterprises.

Foreign individuals and overseas citizens are subject to this standard rate. The change affects tax planning and dividend repatriation for investors. This update was reported by CMS.