What is the dividend 'gross-up'?

Because dividends are paid out of profits on which corporate tax has already been paid, under comprehensive taxation an amount equal to certain dividend income multiplied by a gross-up rate is added to income, and the same amount is then deducted from the calculated tax (dividend tax credit) to adjust for double taxation.

According to the National Tax Service's commentary on the amended tax laws, the gross-up rate was adjusted from 10% to 11% in line with the corporate tax rate increase, applying to income received on or after January 1, 2027. Check the National Tax Service's guidance for the dividends covered and the calculation method.