China ends tax break, taxes FIE dividends to foreigners 20%

Business Sep 02, 2026

China just ended a decades-old tax break for foreign investors.

Starting the Tuesday the government announced the change (early September 2026), dividends paid by foreign-invested enterprises (FIEs) to foreign individuals will be taxed at 20%.

This move is meant to level the playing field between local and foreign investors and fix loopholes that let some companies dodge taxes.

FIEs must withhold, remit by 15th

Now, FIEs have to withhold the tax from dividend payments and remit it by the 15th of the following month.

If they do not, individuals need to pay up by June 30 of the following year.

The change targets aggressive tax planning, like companies reshuffling assets to cut their bills, and closes benefits that helped big names raise money overseas.