Finland:
Dividend Imputation Credit
25 June 1996
Ernst & Young
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The following table illustrates the computation of the imputed dividend credit for an individual in 1993. The table illustrates the taxation of a shareholder with a deduction from investment income (such as interest expense) and the taxation of a shareholder with no deductions.
FIM FIM
TAXATION AT THE COMPANY LEVEL
Taxable income 100
Corporate income tax at 25% ( 25)
Net income after tax 75
Computation Of Shareholders' Taxable Dividend Income
Cash dividends received 75
Imputed tax credit of 1/3 of cash dividend 25
Taxable dividend income 100
Taxation Of Two Different Shareholders With 25% Tax Rate
Taxable dividend income 100 100
Deductions (interest expense, etc.) (100) -
Taxable investment income 0 100
Tax on taxable income 0 25
Less imputed tax credit ( 25) ( 25)
Tax refund 25
Additional tax liability 0
The content of this article is intended to provide a general information on the subject matter. It is therefore not a substitute for specialist advice.
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