Accountant of the Law Firm “NOBILI” Daria Paliura

 

What is more profitable to pay the director’s salary or dividends? How to increase income by minimizing the cost? ⠀

Simply put, dividends – the company’s net profit after taxes, which is distributed in proportion to the shares of the company’s participants. personal income tax (PIT); ​​PIT rates: legal entity (tax agent) payer of the single tax – 9%;

legal entity (tax agent) payer of income tax on a general basis -5%,

military tax (1.5%) ⠀

Let’s move from theory to practice:

Step # 1Determine the terms of accrual and payment of dividends (prescribed in the company’s charter) ⠀

Step # 2Prepare a protocol and order on payment of dividends. Calculate the amount of accrued dividends. ⠀

Consider an example: the amount of accrued dividends for the IV quarter of 2020 UAH 10,000. (the company is a single tax payer):

1) PIT payable: UAH 10,000. * 9% = UAH 900.

2) Military fee payable: UAH 10,000. * 1.5% = UAH 150.

3) The amount of dividends to be paid:

UAH 10,000-UAH 900-UAH 150. = UAH 8,950.

Dividends are paid only to those participants of the company who have contributed to the statutory fund.