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5.6. Qualification of Specific Income Categories for Tax Purposes

Dividend

Dividend includes income in money or other form, paid by a legal person to its founders or shareholders as distribution of net income or profit net of costs and taxes. It includes income distributed by companies opting for the simplified tax regime.

Effective 1 January 2019, the term ‘dividend’ includes distribution of property on liquidation, purchased out of retained earnings and income from the redemption of shares of the portion relating to retained earnings, transfer of assets to shareholders without business purpose and payment of shareholder debt before payment to third parties.

Interest

Interest includes any charge or income from a debt obligation, including income from loans and deposits.

Royalty

Royalty includes income from the use of or right to use copyrights, works of literature, art and science; software, patents, trademarks, design or model, plan, secret formula or process, industrial, commercial or scientific equipment.

Service Fees

Service fees include income from management and finance services.