Procedure for paying interim dividends in 2021

The purpose of existence of any commercial company is to make a profit, and when this is achieved, the founders and other shareholders have the right to expect the payment of income in the form of dividends. The company can calculate and issue them either based on the results of the past year or for a quarter, half a year or 9 months. Such intra-annual incentives are called interim dividends and are calculated on the basis of accounting data on the amount of profit (net of taxes) for the reporting time period in question. It is net profit that is the source of dividend payments.

Let’s figure out what kind of documentation should be used to document the issuance of interim dividends, and how it should be reflected in accounting and reporting.

Rules for payment of interim dividends

So, participants, owners and employees - holders of shares have the right to claim dividends at the end of the year or interim.

The concept of dividends is legislatively approved only for joint stock companies. In the provisions of the Law “On LLC”, the term “redistribution of profits” is used to define such compensation, but to simplify the presentation of information, we will call them dividends.

The payment of dividends can only be initiated by the adoption of an appropriate decision by the meeting of the founders of the JSC/LLC or the sole founder of the LLC. The same document also states the amount of payments due.

The right to issue interim dividends (as well as for the year) is secured by the norms of laws No. 208-FZ “On JSC” and No. 14-FZ “On LLC”, which regulate the activities of enterprises of these forms of business. JSCs pay dividends on placed shares based on the results of a quarter, half a year or 9 months, while LLCs distribute profits among their participants.

Let us pay more attention to the criteria for paying dividends in LLCs, since most enterprises operate in this economic status. Law No. 14-FZ allows the frequency of profit distribution between participants to be established not only once a year, but also once every six months or quarterly, but does not oblige it to be recorded in the charter. Payment of dividends is the right of the enterprise, i.e., having transferred dividends, for example, for the 1st quarter, the company is not obliged to subsequently do this quarterly. She has the right to decide on payment based on her own capabilities at the end of any reporting period. The period during which the LLC has the right to make a decision on the payment of interim dividends is not limited by law, but the time for their payment cannot be more than 60 days from the date of the decision on the distribution of profits and its approval.

There are restrictions on the amount of dividends paid. For a joint-stock company, the volume of transfers should not exceed the amount recommended by the board of founders, and it should be transferred at a time to all shareholders (Article Federal Law No. 208-FZ). For an LLC, the total amount of dividends paid during the year should not exceed the amount of net profit received for the year.

Documenting

In accordance with Art. 9 of the Law of November 21, 1996 N 129-FZ “On Accounting”, all business transactions carried out by the organization must be documented with supporting documents. These documents serve as primary accounting documents on the basis of which accounting is conducted.

The decision on the payment of dividends is made by the general meeting of participants of Optproduct LLC. To make a decision on the payment (declaration) of interim dividends, an extraordinary general meeting of participants was held on November 3, 2009. Based on the results of the general meeting, a protocol is drawn up. It indicates those present, the agenda and decisions made by the general meeting (see Appendix No. 1).

Appendix No. 1

Interim dividends in LLC: how to calculate

Dividend amounts are calculated based on the amount of retained earnings, the amount of which is reflected in line 1370 of the balance sheet. This indicator is the profit at the disposal of the company; it is formed based on the total values ​​for all years of the enterprise’s activity. The meeting of founders, when announcing the amount of dividends to be paid, is guided by the volume of accumulated profits.

Dividends are calculated based on their amount to be paid, approved by the decision of the founders. Typically, income in an LLC is distributed in proportion to the shares of participants invested in the authorized capital, within the limits of the amount of dividends due indicated in the protocol, and in a JSC - according to the types and number of shares held by the holders.

If the company made a loss at the end of the year

So, the source of dividend payment is the company’s profit after tax, i.e. net profit, which is determined according to accounting data.

The tax base for income in the form of dividends that the company pays monthly or quarterly is determined in the manner prescribed by Art. 275 of the Tax Code of the Russian Federation.

However, a situation may arise where, according to interim results, the company made a profit, but at the end of the year it turned out that the year ended with a loss (or, for example, the amount of interim dividends paid is greater than the net profit received at the end of the year).

In such cases, tax authorities adhere to the following point of view. Dividends paid out of interim net profit before the end of the tax period cannot be treated as dividends for income tax purposes. Therefore, such amounts will be considered gratuitously received property, and they must be taxed at the rates provided for the taxation of gratuitously received property (for personal income tax - in the amount of 13%, for income tax - 20%). This opinion was expressed by officials in Letters of the Federal Tax Service of Russia dated March 19, 2009 N ШС-22-3/ [email protected] , Ministry of Finance of Russia dated December 24, 2008 N 03-03-06/1/721.

Companies can keep records of interim dividends during the year in account 84 “Retained earnings” or in a separate subaccount of account 99 “Profits and losses”.

If a company made a loss at the end of the year, then payments made to the founders (shareholders) cannot be considered as dividends and are not recognized as an expense in tax accounting, since they are economically unjustified and are not aimed at generating income. Grounds - clause 1 of Art. 252, paragraph 49 art. 270 Tax Code. Therefore, it is necessary to reverse the accrual and payment of dividends and recognize the accruals as “other expenses”. In this case, the following entries will be made in accounting:

Debit 99 (84) Credit 75

• accrued dividends were reversed;

Debit 75 Credit 68

• dividend tax reversed;

Debit 91 Credit 76

If the founder (shareholder) is a Russian legal entity, the company transfers to it the missing amount of accrued income, which was previously withheld as tax on dividends. The recipient of payments is obliged to independently pay tax to the budget at a rate of 20 percent on the entire amount of income received. And the company that is the source of income payment has an overpayment of income tax to the budget, as a result of which it has the right to submit an updated declaration and apply to the inspectorate for a refund (offset) of previously paid tax at a rate of 9 percent on the basis of Art. 78 Tax Code.

For an individual shareholder, the company is a tax agent and is obliged to withhold tax in the amount of 13 percent on the amount accrued to him.

Interim dividends: postings

In accounting, data on accrued and issued amounts of dividends are accumulated for settlements with the founders on account 75/2, and with the company’s employees for settlements with personnel - on account 70. The corresponding account is the retained earnings account - 84. Typical accounting entries for these operations are as follows:

Example

Comfort LLC decided to distribute a share of the profit received for the 1st quarter of 2021 in the amount of 2,000,000 rubles. between the founders:

— I.T. Sergeev, who has a 30% share in the company’s management company;

— Komarov A.R. (45% in the management company);

— Temp LLC (25% in the management company).

The accountant made the calculations:

Dividends were transferred to participants in May 2021. Taxes were charged on payments:

– personal income tax for individuals – at a rate of 13% on amounts accrued to tax residents, a rate of 15% applies to the income of individuals who do not have resident status;

– income tax for the legal entity Temp LLC, a participant in Comfort LLC and a resident of the Russian Federation - at a rate of 13% of the accrued amount. The tax rate for non-residents is 15%.

Reflected in accounting

If the source of dividend payment is the net profit received by the company in accounting, accrued dividends are reflected as follows:

Debit 84 Credit 75, subaccount “Calculations for payment of income”,

• income was accrued to the founders (shareholders).

If the founders are employees of the company, the accrual of dividends to them must be reflected in the credit of account 70 “Settlements with personnel for wages”. The wiring will be like this:

Debit 84 Credit 70, subaccount “Calculations for payment of income”,

• Dividends were accrued to employees who are founders.

To obtain data on how much the company should pay to each of the founders (shareholders), the accountant needs to organize appropriate analytical accounting.

The accountant of Optproduct LLC compiled a certificate of calculation of accrued dividends and reflected the transactions in accounting.

Let us remind you that when accruing dividends, the company performs the functions of a tax agent. It must withhold and transfer to the budget income tax (for the founders - legal entities), personal income tax (for the founders - individuals). The founder (shareholder) will receive dividends minus tax.

The accountant of Optproduct LLC withholds tax from dividends V.I. Pavlisha in the amount of 6480 rubles. (RUB 72,000 x 9%), and V.N. Nester - in the amount of 4320 rubles. (RUB 48,000 x 9%). On the day of receiving cash from the bank for payment of dividends, December 1, 2009, the accountant transfers the withheld tax to the budget. Grounds - clause 6 of Art. 226 of the Tax Code of the Russian Federation.

Let us note that the Ministry of Finance recommends that the amount of interim dividends paid during the year for which financial statements are prepared be reflected separately in the “Capital and Reserves” section (Letter dated December 19, 2006 N 07-05-06/302).

Moreover, in accordance with PBU 7/98 (approved by Order of the Ministry of Finance of Russia dated November 25, 1998 N 56n), annual dividends recommended or declared in the prescribed manner:

• based on the results of the organization’s work for the reporting year;
• in the period between the reporting date and the date of signing the financial statements for the reporting year.

These payments are disclosed in the notes to the balance sheet and income statement.

When filling out columns 3 and 4 of line 470 of the balance sheet compiled during the preparation of interim financial statements for the reporting period, data from accounts 99 and 84 are used. If, as a result of calculations using the formula below, a negative value is obtained (i.e., an uncovered loss), then it is shown on line 470 in parentheses.

This is shown schematically in the table “Reflection of transactions in accounting.”

Interim dividends in financial statements

The accrual of interim dividends is recorded in the debit of account 84, reducing the amount of profit for the corresponding reporting period - quarter, half-year or 9 months. from the amounts of profit for the quarter, half a year, 9 months, in line 1370 for the amount of due payments. In the balance sheet, the amounts of interim dividends accrued during the year are indicated in specially open lines deciphering the use of profits - 1371, 1372, etc. The paid dividend amounts are reflected in the balance sheet asset, reducing the amount of cash in line 1250. The data in the example given will be reflected in the balance sheet for the half-year.

It is also impossible to see the specific value of dividends paid in the financial results statement. This indicator reduces the total amount of net profit, which is indicated in line 2400. It is more advisable for the user to refer to the explanations attached to the company’s financial statements. In them, the company records the amounts of accrued and paid income and the frequency of payments made.

We reflect transactions in accounting

How to be a “simplistic” person?

If the company applies a simplified taxation system and the founders are interested in receiving dividends, they will have to keep accounting records. The payment of dividends must be confirmed by data from the balance sheet and profit and loss report. Otherwise, tax inspectors may regard such payments to individuals not as dividends, but as ordinary remuneration, taxed at a rate of 13 percent.

M. Tonkovich

Specialist

Audit