Dividends on shares traded on stock market freed from tax

Income tax is not applied to dividends or interest income received from publicly traded shares and bonds that are available for trading on a regulated market, Azernews reports.

"As a continuation of the measures taken in the direction of the development of the capital market, from February 1, 2023, for five years, dividends and interest income paid on publicly offered shares and bonds released for trading on the regulated market are exempted from income tax."

This was reported by the State Tax Service.

"Thus, dividends on shares on the stock exchange are also exempted from tax. The changes made in the Tax Code in 2023 were calculated to increase the target orientation of tax benefits in this direction. In the current situation, the founders of the enterprises are not the owners of the publicly offered and traded shares on the regulated market, but other participants."

"In this regard, the Tax Code has been amended in the direction of reducing the tax rate at the source of payment of dividends from 10 percent to five percent, cancelling the tax exemption for dividend income of state and local self-government bodies, budget organisations, and public legal entities created on behalf of the state, and charging a tax at a five percent rate," it was noted.