China will levy a 20% individual income tax on dividends, interest and bonuses received by foreign individuals from foreign-invested enterprises effective Sept. 1, according to a Tuesday release from the Ministry of Finance and the State Taxation Administration.
The change removes a tax exemption that had been in place since 1994 and brings the treatment of dividends received by foreign individuals broadly in line with that for domestic individuals, according to a Bloomberg Law report.
The move is part of Beijing's broader effort to increase tax revenues and close loopholes in the tax system, the report said.