DGAP-News: Haier Smart Home Co., Ltd. / Key word (s): Dividend
08/17/2021 / 16:04
The issuer is solely responsible for the content of this announcement.
Announcement of the D-share dividend
Haier Smart Home Co., Ltd.
Qingdao, Shandong Province, People’s Republic of China
The company’s annual general meeting on June 25, 2021 resolved that for each registered D ordinary share a
Dividend per share of EUR 0.04756088 gross
Dividend per share of EUR 0.04280479 less 10% withholding tax in China, payable from August 20, 2021
for the 2020 financial year. Those shareholders whose shares in the company are recorded on August 19, 2021 (reference date) are entitled to dividends.
The exchange rate of 1 EUR = 7.6954 RMB is based on the average exchange rate of the last 5 business days before the general meeting.
The company’s shares will be listed on August 20, 2021 “ex dividend” in the sub-segment of the regulated market with additional post-admission requirements on the Frankfurt Stock Exchange (Prime Standard).
The dividend will be paid out by Clearstream Banking AG after deducting the Chinese withholding tax of 10%. The Chinese withholding tax can generally be offset against the German corporation tax (income tax) on Chinese income or can be deducted when determining the income.
A German legal entity that pays out the investment income (i.e. usually the respective custodian bank) pays the dividends of a company based in the People’s Republic of China to shareholders with unlimited tax liability in Germany after deducting the German investment from income tax (capital gains tax). The withholding tax is generally 25% plus a solidarity surcharge of 5.5% (the effective tax rate is thus 26.375%) and, if applicable, church tax (depending on denomination and country of residence). The basis of assessment for capital gains tax is the gross dividend.
In principle, the obligation to deduct capital gains tax always applies to the domestic paying agent, unless the shareholders have submitted a non-assessment certificate or an exemption order. Whether the dividend is actually taxable for the shareholder is irrelevant for the deduction of capital gains tax. An exemption from tax deduction is therefore possible if, for example
– the creditor of the investment income is a natural person with unlimited tax liability who can prove to the domestic payer by submitting a valid non-assessment certificate in the original that he will probably not be assessed for income tax;
– The creditor of the investment income is a natural person with unlimited tax liability who has issued a valid certificate of exemption. An exemption certificate is the private written instruction of the obligee to the person entitled to withhold not to deduct any capital gains tax up to a tax-free maximum amount of EUR 801 (or EUR 1,602 in the case of jointly assessed spouses / civil partners);
– The creditor of the investment income is a tax-exempt corporation or a legal person under public law (for the individual requirements)
– the investment income is part of the operating income of the obligee from capital assets and the capital gains tax to be paid by this obligee would, due to its nature, be higher in the long term than the total income or corporation tax to be applied to his transactions. This must be proven by a certificate from the tax office responsible for the creditor;
– the creditor of the investment income is a legal person, association of persons or assets with unlimited tax liability in Germany that serves tax-privileged purposes. This can apply to clubs, for example. Proof of preferential taxation must be provided by a certificate from the tax office responsible for the creditor.
For the respective individual prerequisites, reference is made at this point to the provisions of German tax law (in particular Section 43 Paragraph 2, Paragraph 3 in conjunction with Section 44a Income Tax Act). To check whether the Chinese withholding tax levied in the amount of the withholding tax law under the German-Chinese double taxation agreement can be offset directly against the capital gains tax in the withholding process, this is only possible if the dividends are considered income from capital assets, which is the case in particular for natural persons who hold shares as non-business assets (Section 43a (3) sentence 1). of the German Income Tax Act, Federal Ministry of Finance (BMF), January 18, 2016, Federal Tax Gazette (BStBl.) I 2016, p. 85, Rn. 202) According to the overview of the G Federal Central Tax Office (BZSt) with regard to the creditable foreign withholding tax rates, the Creditable Chinese withholding tax 10% if there is no exemption.[1] If the Chinese withholding tax is offset against the capital gains tax by the paying agency, the capital gains tax is only levied in the amount of the difference to a tax deduction of 25%. If it is not possible to offset the withholding tax for the paying agent, the foreign withholding tax cannot be offset at the level of the paying agent using the deduction procedure. The shareholder can then exempt himself from taxation in the assessment procedure.
The taxation of dividends for persons with unlimited tax liability in Germany can be summarized as follows:
1. Natural persons who hold the shares as non-business assets for tax purposes:
– The gross dividend is generally subject to the special withholding tax rate (25% plus solidarity surcharge of 5.5% and, if applicable, church tax). The tax liability is considered settled through the proper deduction of capital gains tax.
– As part of the tax assessment, the taxpayer can optionally tax the gross dividend at the statutory tax rate as part of a tax benefit test. In this case, the German capital gains tax is reduced in accordance with Section 43 Paragraph 3 Clause 1 EStG and can be offset against income tax without restriction within the scope of Section 36 EStG. The Chinese withholding tax taken into account in the withholding of capital gains tax in accordance with Section 43 Paragraph 3 Sentence 1 EStG is to be offset against the additional statutory income tax applicable to the additional capital income (Section 32d Paragraph 6 Sentence 2 EStG).
– Actual advertising expenses are not deductible. Instead, the partner is granted savings capital of EUR 801 or EUR 1,602 in the case of jointly assessed spouses / partners.
2. Natural persons who hold the shares for tax purposes or through a partnership as business assets:
– With the partial income method, 60% of the gross dividends are taxable. 60% of the associated business expenses can be claimed as a tax reduction.
– The German capital gains tax levied can be offset against income tax without restriction; even a refund is possible, unless there is income tax (§ 36 Abs. 4 EStG).
– Within the scope of § 34c EStG, the Chinese withholding tax, for which there is no further reduction claim, is to be offset against the income tax payable on foreign income from China (country limitation, § 68a of the German Income Tax Implementation Ordinance (EStDV)). As a result, operating expenses incurred in the economic context of the dividend reduce the amount to be credited. If there is no income tax (e.g. due to losses in Germany), the Chinese withholding tax cannot be offset; a refund is not possible. Upon request, a tax deduction can be taken into account in the tax return instead of a credit when determining the income.
– For trade tax purposes, dividends are generally to be set at 100% if the share (in the share capital) at the beginning of the assessment period (January 1) is less than 15%.
3. Persons subject to corporation tax (including corporations and companies subject to corporation tax):
– In the case of corporation taxpayers, the gross dividend is generally subject to corporation tax in full, unless the shareholding was 10% or more at the beginning of the calendar year. From a participation of 10%, 95% of the gross dividends are exempt from corporation tax.
– Operating expenses in connection with the dividends can in principle be taken into account.
– The German capital gains tax withheld and paid by the paying agent can always be offset against corporate income tax; A refund is even possible, provided that no corporation tax is levied (Section 36 (4) EStG).
– Within the limits of § 26 KStG and § 34c of the Income Tax Act, the Chinese withholding tax, for which there is no further reduction claim, is to be offset against the corporate income tax on foreign income from China (country limitation, § 68a Income Tax Implementation Ordinance). As a result, operating expenses incurred in the economic context of the dividend reduce the amount to be credited. If there is no corporation tax (eg due to losses in Germany), the Chinese withholding tax cannot be offset; a refund is not possible. Upon request, a tax deduction can be taken into account in the tax return instead of a credit when determining the income.
– For trade tax purposes, dividends are to be set at 100% if the share (in the share capital) at the beginning of the assessment period (January 1) is less than 15%.
For non-resident shareholders, the Chinese withholding tax of 10% can be offset against a tax payable in the respective country on the dividend in accordance with the national tax regulations of the respective country or the provisions of a corresponding double taxation agreement.
We would like to point out that the above information is only intended to provide an overview and, due to special circumstances, exceptions that are not explained in more detail may apply in individual cases.
Investors are advised to seek advice from a tax advisory profession about the specific tax consequences of their investment.
Frankfurt am Main, August 2021
Haier Smart Home Co., Ltd.
[1] See https://www.bzst.de/SharedDocs/Downloads/DE/EU_OECD/anrechenbare_ausl_quellensteuer_2021.pdf
08/17/2021 Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
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