Dividend Distribution in an LLP
What Taxpayers Need to Know
When Are Dividends Paid?
✔ Only upon a resolution of the General Meeting of the LLP participants.
✔ Dividends are paid from the net profit based on the results of a quarter, half-year, or financial year.
✔ The payment must be made within 1 month from the date the resolution is adopted.
If the Dividend Recipient Is a Resident Legal Entity
✔ Dividends are included in the annual aggregate income.
✔ The annual aggregate income may be reduced by the amount of dividends in accordance with the Tax Code.
✔ No Corporate Income Tax (CIT) is withheld at the source of payment.
If the Dividend Recipient Is a Non-Resident Individual
The LLP is required to:
✔ withhold Individual Income Tax (IIT) when paying dividends;
✔ remit the tax to the state budget within the prescribed deadline;
✔ submit the required tax reporting.
If an applicable international tax treaty exists, its provisions may be applied, provided the requirements of the Tax Code are met.
Key Takeaways
📌 The decision to distribute dividends is made by the General Meeting of the LLP participants.
📌 Dividends must be paid within 1 month from the date the resolution is adopted.
📌 The tax treatment depends on the recipient's tax status (resident or non-resident).