How can a tax agent reflect dividends in the 2-NDFL certificate?

Beginning investors have many questions when it comes to paying taxes. Due to low financial literacy in Russia, this is not discussed in detail anywhere. Therefore, today I will talk about all the features of taxation of dividends from Russian and foreign companies.

Personal income tax rates are prescribed in Article 214 of the Tax Code. For resident individuals the rate is 13% and 15% for non-residents. It is worth noting that all Russian brokers are tax agents according to the same Tax Code of the Russian Federation. Therefore, they automatically calculate and withhold tax on dividend income for Russian companies. Our brokers are not tax agents for American stocks.

What is the general procedure for reflecting dividends to individuals in the new 2-NDFL certificate?

Dividends in the new 2-NDFL should be reflected along with other income taxed at the same rate. In a typical case, when the individual recipient is a tax resident of the Russian Federation, this will be 13%.

For dividends, an income code is provided in 2-NDFL 1010. The amount according to the code should be shown in full (along with tax).

Sections 1-3 of the new certificate and the Appendix separately for dividends do not need to be filled out.

Sign 1 is added to the new certificate if the dividends were paid in cash and personal income tax was withheld at the source (Article 226 of the Tax Code of the Russian Federation).

2-NDFL with sign 1 must be submitted no later than April 1 of the year following the year of payment.

Sign 2 (tax not withheld) must be included in the certificate if dividends were paid in non-monetary form (for example, in kind). In this case, the payer of dividends does not withhold tax at source and the obligation to calculate and pay personal income tax to the budget falls on the recipient of dividends (Article 228 of the Tax Code of the Russian Federation).

2-NDFL with sign 2 must be submitted no later than March 1 of the year following the year of payment.

Should dividends be reported?

When paying dividends, the paying company acts as a tax agent for the individual. In other words, it is responsible for the withholding and payment of tax on individuals. Whether this should be reflected in the 2-NDFL form or not depends on the form of ownership of the company:

• LLCs are required to file 2-NDFL when paying dividends to their founders.
• - No. Instead, they include this information in the income tax return. Namely in Appendix 2.

This is indicated in the letters:

• Ministry of Finance 03-04-07/3263 dated January 29, 15.
• Federal Tax Service BS-4-22/1443 dated February 2 of the same year.

Sample filling in 2021

Now let’s look at how the 2-NDFL certificate is filled out using the example of Clubtk.ru LLC. The organization submits a report to employee Voronov A.V. To fill it out you must follow the instructions:

1. In general information, everything is quite simple: TIN, KPP, name of the organization or individual entrepreneur, reporting year, Federal Tax Service code, reorganization code and TIN, KPP of the reorganized organization, OKTMO code, telephone.
2. The certificate number is the serial number of the form sent in the reporting period.
3. Sign (1, 2, 3, 4) - indicated depending on the reasons for submitting the document.
4. Correction number: 00 - primary, 99 - canceling. All others from 01 to 98 are corrective reports.
5. Data on taxpayers is provided from documents available to the tax agent.
6. In the “Tax rate” section, you must indicate the percentage at which personal income tax is withheld. Today there are four rates: 13, 15 and 30 and 35%, but in 2021 only three were in effect (15% on income exceeding 5 million rubles, introduced in 2021). The most common rate is 13%. It is used for employees with Russian resident status.
7. Information on the amounts of income and calculated and withheld tax is taken for the entire reporting period.
8. Deduction codes are entered taking into account the order of the Federal Tax Service of Russia dated September 10, 2015 No. ММВ-7-11/. Look at our example of a 2-NDFL certificate; it contains deduction code 126, since the employee has a child.
9. Notification type code (provided that a notification is issued):
   number 1 is entered if the taxpayer has been issued a notice of the right to a property deduction;
10. number 2, if the taxpayer has been issued a notice of the right to a social deduction;
11. number 3, if the tax agent has been issued a notice confirming the right to reduce income tax on fixed advance payments.
12. The application is completed for the months in which income was paid or a deduction was provided.

IMPORTANT!

If the company did not start operating from the beginning of the year or did not pay remuneration to individuals for some period, it submits a certificate indicating information only for those months when payments were made or deductions were provided. In this case, the procedure for filling out the form and sample 2-NDFL for 10 months or another period are identical.

Read more: Bonus: what income code to indicate in 2-NDFL

When is personal income tax paid?

Payment of profits occurs in accordance with the legislation of the Russian Federation.

It is listed at the following frequency:

• Every quarter;
• every half year;
• annually.

Profit distribution occurs in accordance with the size of the share of each founder (shareholder).

The procedure itself consists of three stages:

1. Determining the amount of profit that will be distributed.
2. Making a decision on the transfer of dividends.
3. Payment of funds.

After making a decision to pay the funds, the organization has 60 days to transfer the money. Personal income tax is withheld on the day of payment. For residents of the Russian Federation the rate is 13%, for non-residents – 15%.

The deadlines for transferring the fee to the state budget vary, they depend on the organizational and legal form of the enterprise:

• For LLC – the next day after payment;
• for JSC – within a month after the funds are transferred.

What is a deduction for dividends in 2-NDFL?

In business practice, not only an individual can own a share in a company, but the company itself can be the owner of shares or shares of other legal entities. Dividends received from such legal entities, firstly, are included in the company’s profit (that is, they form the dividends of the company itself), and secondly, dividends received by the company are also subject to dividend tax.

That is, in the case when the profit distributed by the company includes dividends received and already taxed, double taxation of the same amount results.

Therefore, the legislation provides for the withdrawal of the amounts of such dividends from the second taxation by providing a deduction. The deduction is encoded 601 in deduction codes for 2-NDFL.

The deduction amount is determined by the formula:

Example

Company B received dividends from Company A on February 15, 2019 in the amount of RUB 3,000,000. Dividend tax of 13% was withheld at source and transferred to the budget.

On February 20, 2019, company B distributed its own profit in the amount of RUB 8,000,000. for dividends in proportion to shares in the management company.

The founder Sidorov owns 25% of the management company. Let's determine the amount of his income and deduction.

Dividend income for Sidorov (code 1010):

8,000,000 * 25% = 2,000,000 rub.

The dividend deduction for Sidorov (code 601) will be:

3,000,000 * 25% = 750,000 rub.

Under certain conditions, the tax rate on dividends received by a Russian legal entity may be equal to 0. For dividends with a rate of 0%, the personal income tax deduction is not calculated!

Delivery formats

When the company has several people, 2-NFDL can be submitted to the tax office on paper. If the number of individuals who received income in the company exceeded 10 people, then the report will have to be submitted only in electronic form (clause 2 of Article 230 of the Tax Code of the Russian Federation) via telecommunication channels.

To prepare reports, the free software of the Federal Tax Service “Taxpayer Legal Entity” is used. To send an electronic report to the Federal Tax Service in electronic form, you must enter into an agreement with an authorized telecom operator, obtain an electronic digital signature and install software.

How to check a certificate before submitting it to the tax office electronically? To do this, just download the free Tester program from the official website of the Federal Tax Service. Having installed it on your computer, they check the file sent to the Federal Tax Service for compliance with the format for submitting the report in electronic form.

Example

Romashka LLC has two founders: Ivanova A.A. (owns 60% of the capital) and Petrova B.B. (owns 40% of shares) - both residents of Russia. Based on the results of the fourth quarter of 2021, at the meeting of shareholders it was decided to distribute 100,000 rubles of net profit. This means that the owners are entitled to:

Ivanov: 100,000* 0.6 = 60,000 rubles.

Petrov: 100,000* 0.4 = 40,000 rubles.

From the indicated amounts of income, personal income tax is withheld at a rate of 13%. The tax amount is calculated as:

For Ivanov: 60,000* 0.13 = 7,800 rubles. The amount “in hand” with the deduction of personal income tax is 52,200 rubles.

For Petrov: 40,000* 0.13 = 5,200 rubles. Minus tax, the participant will receive 44,800 rubles.

Romashka LLC is obliged to transfer personal income tax in the total amount of 13,00 rubles to the details of “its” Federal Tax Service no later than the next day after settlement with shareholders. Otherwise, it will be held accountable by the fiscal authorities as a tax agent.

Important! If the amount of dividends is returned to the LLC due to an error in the details, there is no need to transfer the personal income tax again when sending the payment again.

Who is required to submit certificates?

A sample of the new 2-NDFL certificate is required for all tax agents who are required to report to the Federal Tax Service. They are organizations, individual entrepreneurs, other persons, in accordance with Article 226 of the Tax Code of the Russian Federation, who pay income to an individual who is a taxpayer, employees who are in labor relations with the organization, working under a contract, and other citizens. Such a person is obliged to calculate, withhold tax from the taxpayer and transfer it to the budget.

The form for submission to the Federal Tax Service is filled out for each individual.

Read more: Code of income in the form of vacation compensation

Each tax agent is obliged to ensure accounting of income paid to individuals, deductions provided to them, and taxes calculated and withheld. For this purpose, a tax register is compiled. It opens immediately upon hiring an employee. The register is developed and approved independently by the tax agent and contains information:

• about an individual, his identification data (full name, date of birth, passport details, TIN);
• types and amounts of income;
• provided deductions;
• amounts of calculated, withheld and transferred taxes;
• dates of tax withholding and its transfer to the budget, details of payment documents.

The data from this particular tax register is used to fill out forms. Please note: if the organization paid the employee only benefits that are not subject to personal income tax (for example, for caring for a child under 1.5 years old), then the certificate does not need to be submitted to the Federal Tax Service.

ConsultantPlus experts sorted out when and how to submit the updated 2-NDFL. Use these instructions for free.

Which form to use

Federal Law No. 325-FZ dated September 29, 2019 stipulates that income certificates for 2021 will not be submitted separately. But for 2021, you should report according to the previous rules, and take the form provided by the order of the Federal Tax Service of Russia dated October 2, 2018 No. ММВ-7-11/ The report, which organizations and individual entrepreneurs must send to the tax authorities, has the abbreviation “form 2” in the title -NDFL" and the official number in the tax document classifier - KND 1151078. The certificate form consists of an introductory part, two sections and one appendix and looks like this:

Normative base

Order of the Federal Tax Service of Russia dated October 2, 2018 No. ММВ-7-11/ “On approval of the form of information on the income of individuals and the amount of personal income tax, the procedure for filling it out and the format for its submission in electronic form, as well as the procedure for submitting information about income of individuals and amounts of personal income tax and messages about the impossibility of withholding tax, amounts of income from which tax is not withheld, and the amount of unwithheld personal income tax" Order of the Federal Tax Service of
Russia dated October 15, 2020 No. ED-7-11/ “On approval of the form for calculating the amounts of personal income tax calculated and withheld by the tax agent (Form 6-NDFL), the procedure for filling it out and submitting it, the format for providing the calculation of the amounts of personal income tax calculated and withholding by the tax agent in electronic form, as well as forms of a certificate of income received by an individual and withheld amounts of personal income tax" (together with the "Procedure for filling out and submitting calculations of amounts of personal income tax calculated and withheld by a tax agent (form 6-NDFL)").

How to calculate the tax amount

When calculating the fee, standard, property, and social deductions are not applied. It is calculated with each payment, even if there are several of them during the year. If only the profit of the organization itself is distributed, the budget payment is calculated using the usual formula: income X tax rate.

For example, an LLC has two founders, Petrov I.A. and Smirnov P.O., their shares are 70 and 30%, respectively. Both are residents of the Russian Federation. Distributed profit for 2021 amounted to 180,000 rubles.

Personal income tax certificates 2 for business owners will reflect the following amounts of income and tax:

• Petrov I.A.: 180,000 X 0.7 = 126,000 X 13% = 16,380 rubles.
• Smirnov P.O.: 180,000 X 0.3 = 54,000 X 13% = 7,020 rubles.

Also, in addition to its profits, an organization can receive dividends from other organizations. If this is income subject to income tax at a rate of 0%, then personal income tax is calculated in the usual way.

In other cases, the calculation takes place in two stages:

1. The amount of tax deduction is determined = (dividends (hereinafter referred to as D) of the participant / total amount D) X for D received. The latter indicator includes amounts not paid previously, as well as non-taxable income tax - 0%.
2. The tax is calculated = (D of one participant - deduction) X 13%.

Example: Voskhod LLC has a 50% share in the authorized capital of Zarya LLC. The company received a profit of 500,000 rubles for distribution among the owners. The founders of Voskhod LLC are equal shares of April LLC and S.M. Ivanov. The total amount of profit distributed by the Voskhod company was 1,200,000 rubles.

Calculation for Ivanov S.M.:

1. Deduction – (600,000 / 1,200,000) X 500,000 = 250,000 rubles.
2. Personal income tax – (600,000 – 250,000) X 13% = 45,500 rubles.

Income tax

When calculating income tax, organizations do not include accrued dividends as expenses. This prohibition is contained in paragraph 1 of Art. 270 Tax Code of the Russian Federation.

Now let’s look at the procedure for filling out an income tax return. Let us remind you that its form and procedure for filling out were approved by order of the Federal Tax Service of Russia dated October 19, 2016 No. ММВ-7-3/ [email protected] (hereinafter referred to as the Procedure for filling out the declaration).

If the company paid dividends in any quarter, then this operation should be reflected in the income tax return for the corresponding reporting period (clause 1.1 of the Procedure for filling out the declaration). Consequently, such a transaction will be reflected in subsequent reporting periods, as well as in the annual declaration.

The amounts of dividends paid are shown in section A “Calculation of tax on income in the form of dividends (income from equity participation in other organizations established on the territory of the Russian Federation)” and in section B “Register - breakdown of dividend amounts (interest)” of Sheet 03 “Tax calculation on the profits of organizations from income withheld by the tax agent (the source of payment of income).”

Please note: in clause 11.2.1 of the Procedure for filling out the declaration it is stated that Sheet 03 is filled out in relation to each decision on the distribution of profit remaining after taxation. When making an interim payment of dividends, the code “1” is indicated in the “Type of dividends” detail. The “Tax (reporting) period (code)” detail indicates the code of the period for which dividends are distributed. The “Reporting year” requisite indicates the calendar year for the reporting (tax) periods of which dividends are paid. If payments are made under several decisions in the current period, then several Sheets 03 are submitted.

In addition, the amount of dividends must be reflected in subsection 1.2 “For organizations paying corporate income tax on income in the form of dividends, interest” of section 1 “Amount of tax payable to the budget, according to the taxpayer (tax agent)” of Sheet 01 of the declaration.

Joint-stock companies that independently pay dividends on shares to their shareholders fill out Appendix No. 2 “Information on the income of an individual paid to him by a tax agent from transactions with securities, transactions with derivative financial instruments, as well as making payments on securities of Russian issuers.”

When to submit reports

Tax agents provide reporting after the end of the period, i.e. next year. The deadline according to general rules is April 1. If the personal income tax could not be withheld - until March 1, and when the company does not provide information within the prescribed period, it will be fined in the amount of 200 rubles for each certificate.

In cases where the data was submitted incorrectly or incompletely, a fine of 300-500 rubles is imposed for each violation, or the head of the company is held accountable - a fine of 100 to 300 rubles.

Important! An error found and corrected by a tax agent before the inspector is not subject to a fine. Corrections are made by adjusting reporting.

Dividends are income for founders and shareholders. And just like with other remunerations, personal income tax is withheld. They are marked in the certificate with code 1010. If the founder receives other remuneration in addition to dividends, all income is indicated together. There is no need to fill out different sections 3 and 5.