It is not easy for an individual to increase his or her assets. Until recently, real estate was considered the best investment vehicle, but due to policy changes, interest in new investment destinations is increasing. Korea’s stock market, which is still undervalued, is a very attractive investment destination.
There are various investment strategies and there are some people who make high returns with their own techniques, but since it is an investment form with risks, those who are just starting out need a lot of study. One of the safest ways to invest in stocks that are risky is to receive dividends. So, today, we will summarize how to receive stock dividends and when to receive them.
Stock Dividend Meaning
We buy and sell stocks of companies listed on the domestic stock exchange. So, when we own the stock, we become shareholders of the company.
In that case, the company operates for a certain period of time and distributes a portion of the profits generated to the shareholders, which is said to be distributed. When a dividend is paid out in cash or stock, it is called a cash dividend, and when a dividend is paid in cash, it is called a stock dividend. 주식 배당금 받는법
How to receive stock dividends and what are the factors
As mentioned earlier, dividends are the distribution of a portion of the profits generated by business for a certain period to shareholders. In this case, a certain period is usually based on the business year. This is called the dividend base date, and if you hold the stock for one year and sell the stock before the dividend base date, you cannot receive a dividend.
Conversely, if you do not hold the stock for one year and then purchase the stock on the dividend date, you can receive dividends. Simply put, in the case of a company that has set the end of December as the settlement date, it must be registered on the shareholder list by the end of December in order to receive dividends. However, there is something to be aware of here.
Even if you are a shareholder by the end of December, the stock will be traded on December 31, and if you buy on that day, you will not receive a dividend. We usually use HTS to buy and sell stocks from time to time, so we think that they are immediately traded, but it is the third business day that we actually trade stocks and the transaction price is settled. As a simple example, it is for this reason that you cannot withdraw your deposit immediately after selling stock. Paintooth
Therefore, since the stock was completely traded on the three business days including the trading day, the listing on the shareholder list for dividends must also take this into account. So, in order to be listed on the shareholder register by December 31st, stock trading must actually end on December 29th. This is referred to as the dividend base date mentioned earlier.
Of course, it is necessary to keep this in mind because the dividend base date may be earlier than a business day if it is closed due to a weekend or public holiday. If the dividend base date is December 29, and you sell the stock on the 30th, you can receive the dividend because it is already registered as a dividend payout in the shareholder register.
tax on stock dividends
When you receive a stock dividend, it will be automatically transferred to your stock trading account. At this time, the remaining amount after withholding tax will be deposited, and 15.4% of the 14% income tax and 1.4% inhabitant tax will be withheld from stock dividends.
However, in the case of other financial income such as bank interest, if the sum of stock dividend income does not exceed 20 million won, the withholding tax rate is 14% as mentioned above. A progressive tax rate is applied accordingly. The progressive tax rate is 6~38%, and in principle, the higher amount of tax is imposed between separate taxation and comprehensive taxation.
Share Dividend Payment Date / Deposit Date
As explained above, if you hold shares on the dividend base date and are listed on the shareholder list, you can receive dividends. However, it does not pay dividends directly.
Dividends are generally paid out within one month after the general shareholders’ meeting. Therefore, it is possible to confirm the exact share dividend payment date by checking the disclosure of the stocks you hold and confirming the date of the general meeting of shareholders.
So far, we have summarized the stock dividends. For those who are new to stocks, it may feel difficult due to unfamiliar words.
Of course, it is not an easy content and it requires a lot of study, but if you know it, it will be helpful information for investing in stocks. If you are interested in stocks or have been interested in stock dividends, I hope you will read this and put it to good use.