How to correctly fill out an income tax return when paying dividends

Structure of Sheet 03

The current form of the company income tax declaration is established by order of the Federal Tax Service of Russia dated October 19, 2021 No. ММВ-7-3/572. According to it, Sheet 03 of the income tax return in 2021 is intended to calculate the income tax that the company must withhold as a tax agent and source of payment. The same order established the rules for filling out the income and profit declaration (hereinafter referred to as the Procedure). Who should fill out Sheet 03 of the income tax return becomes clear from the three sections it includes:

Structural part of Sheet 03	What to reflect	What norms of the Tax Code of the Russian Federation should we follow?
Section A	Calculation of tax on dividends/income from equity participation in other organizations established in Russia	By equity participation: Art. 275; Art. 284; clauses 4 and 5 of Art. 286; clauses 2 and 4 art. 287; Art. 310.1.
Section B	Calculation of tax on interest income on state and municipal securities	Article 281 Clause 5 of Article 286 Paragraph 4 of Article 287 Articles 328 and 329
Section B	Register-decoding of dividend amounts (percent)	–

As you can see, dividends to individuals are also reflected in Sheet 03 of the income tax return (in lines 020, 021, 022, 023, 024, 030, 040, 050, 051, 052, 053, 054, 060). That is, it shows not only the income addressed to the legal entity as a whole, but also the dividends that this company accrued to individuals and legal entities, and submits this report as a tax agent.

Dividends and personal income tax

The concept of “dividend” is defined both in tax and civil legislation. However, since we are talking about calculating personal income tax on this type of income, you should use the wording contained specifically in the Tax Code of the Russian Federation. This document (Article 43, paragraph 1) states that a dividend means income received as a result of the company's distribution of the remaining after-tax profits.

When such income was received from a foreign organization, then if it is considered a dividend under the law of that state, then it is also subject to personal income tax in Russia.

Personal income tax rates

To calculate income tax when paying dividends, two main rates are used:

13% must be paid by an individual who is a resident of the Russian Federation;
for non-residents the rate is 15%.

Calculation formula

The following formula is used to calculate tax:

NDFLDiv = Div * N%, where

Div – dividends received;

N% - tax rate.

For example, 87 thousand rubles were accrued. dividends. Then you need to withhold tax in the amount of: 87,000 * 13% = 11,310 rubles.

Who is obliged to include Sheet 03 in the declaration

Now about who fills out Sheet 03 of the income tax return. In relation to Section A this is:

companies - issuers of securities (i.e., distributing the remaining profit after payment of tax) and recognized in this regard as tax agents on the basis of clause 3 and sub. 1, 3 p. 7 art. 275 Tax Code of the Russian Federation;
companies are not issuers of securities, but pay income on them (must indicate the issuer's TIN) and are recognized in this regard as tax agents on the basis of sub-clause. 2, 4, 5, 6 clauses 7 and 8 art. 275 Tax Code of the Russian Federation.

In turn, Section B is intended for those organizations that pay interest on state and municipal securities. The tax on them may be:

15% (subclause 1, clause 4, article 284 of the Tax Code of the Russian Federation);
9% (subclause 2, clause 4, article 284 of the Tax Code of the Russian Federation).

Also see “Income tax rate in 2021 for legal entities.”

Tax on dividends on Russian shares

The amount of tax depends on whether an individual is a resident of the Russian Federation or not.

Reference. A resident is considered a person who stays on the territory of Russia for more than 183 calendar days during the year.

The obligation to transfer tax on dividends paid to individuals to the budget lies with the issuing company. This means that a person receives income that is already free from personal income tax. But this is done only if payment in cash is provided. If dividends are paid in a different form, then they act differently. The company from whose shares the taxpayer received income must inform the Federal Tax Service that it is unable to remit the tax. Thus, the obligation to pay personal income tax passes to the individual. Tax must be paid the following year after receiving dividends. A 3-NDFL declaration must be submitted in advance.

Rules for filling out Sheet 03

One of the basic principles for filling out Sheet 03 of the income tax return is on an accrual basis. Since the profit from dividends and/or shares in other businesses, the company shows:

for the reporting period – 1st quarter, half a year and 9 months;
then for the entire tax period - a calendar year.

Sometimes the question arises: is it necessary to fill out Sheet 03 of the income tax return several times if there were several decisions on the payment of dividends during the year? Yes, this is necessary: one such decision is a separate Sheet 03 filled out for it (clause 11.2.1 of the Procedure).

In general, you need to show information about dividends:

1. In Section A and B of Sheet 03.

2. Subsection 1.3 of Section 1 of Sheet 01.

Section B of Sheet 03 is filled out for each organization to which the dividends shown in Section A of Sheet 03 were accrued. Including those taxed at a zero rate.

Also see “The most important things about the income tax return for the 1st quarter of 2021 and a sample for filling it out.”

When is tax withheld?

The deadline for paying personal income tax on dividends depends on who will transfer it.

The broker withholds tax on each withdrawal of funds from the client's brokerage account. At the end of the calendar year, the broker determines the tax base for the past tax period, taking into account the tax paid. If it turns out that not all tax has been withheld, an additional payment will be made.
When an individual pays tax on his own, this must be done no later than July 15 of the year following the year in which dividends were received. This provision is contained in Article 228 (clause 4) of the Tax Code of the Russian Federation.

Reference. When there are not enough funds in the investor’s account to pay personal income tax, the broker is obliged to inform the tax office about this, and the individual must pay the required amount upon notification of the Federal Tax Service no later than December 1.

Sample filling

Now let's give an example of filling out Sheet 03 of the income tax return in 2021.

Let’s assume that Guru LLC submits income tax returns every quarter. In 2021, this company received dividends in the amount of 8 million rubles. Among them:

taxed at a zero rate – 2 million rubles;
taxed at a rate of 13% - 6 million rubles.

These dividends were not taken into account when calculating the tax on dividends paid by Guru LLC in 2021.

The participants decided to distribute profits for 2021 in the amount of 11 million rubles. Dividends were paid on March 22, 2018, and the tax withheld from them was transferred to the treasury on March 23, 2018.

From the total amount of dividends:

2 million rubles - accrued to its individual participant;
9 million rubles – to participants-legal entities.

The table below shows the main indicators of income tax on dividends issued to organizations.

Members of Guru LLC	Dividends accrued, rub.	Tax rate, %	Tax on dividends, rub.
LLC "Sila"	3 900 000	0	0
LLC "Trimmer"	3 100 000	13	403 000
LLC "Dar"	2 000 000	13	260 000
Total including Trimmer and Dar LLC	9 000 000	–	663 000
Total including Trimmer and Dar LLC	5 100 000	13	663 000

Since the dividends were paid based on only one decision of the owners, Guru LLC will include one Sheet 03 in the declaration for the first quarter of 2018, in which it will fill out:

one Section A;
three Sections B (for each company receiving dividends).

In addition, Guru LLC will include subsection 1.3 of Section 1 of Sheet 01 in the report.

As a result, you need to fill out the declaration as follows:

In the report for half a year, 9 months and the whole of 2021, in lines 01 to 21, as well as in all lines 040 of subsection 1.3 of Section 1 of Sheet 01, dashes are placed for these dividends.

In the report for half a year, 9 months and the whole of 2021, Section A of sheet 03 for these dividends is drawn up in the same way as in the declaration for the 1st quarter. Except lines 110 and 120:

In the report for half a year, 9 months and the whole of 2021, dashes are placed on these dividends in lines 040, 050 and 060 of Section B of Sheet 03.

Methods for filing a return and paying tax

There are several options for submitting a declaration to the tax office:

you can take the document or take it to the Federal Tax Service, fill it out by hand and take it personally to the inspectorate;
do the same through a representative;
submit documents through the MFC;
the completed 3-NDFL can be sent by registered mail with acknowledgment of receipt;
register on the Federal Tax Service website and fill out the document in your personal account;
download the special “Declaration” program and send the finished file to the inspectorate.

Payment Methods:

pay in the taxpayer’s personal account;
fill out a paper form manually or on a computer, then print it out, and pay in cash at any bank;
pay through the State Services portal;
pay with a bank card through the remote service system.

Reference. From 2021 it is allowed to pay taxes for others. This means that tax can be paid from a card belonging to another person. The money will be credited according to the details specified in the payment order.