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China Communications Services Corporation Limited Annual Report 2015
REPORT OF THE DIRECTORS
DIVIDENDS
The Board proposes a final dividend of RMB0.1011 per share and a special dividend of RMB0.0101 per share, and the total
dividend is RMB0.1112 per share (pre-tax) for the year ended 31 December 2015. The dividend proposal will be submitted for
consideration at the annual general meeting to be held on 24 June 2016 (the “AGM”).
Dividends will be denominated and declared in Renminbi. Dividends will be paid in Renminbi for holders of domestic shares and
holders of H shares (including enterprises and individuals) who invest in the H shares of the Company listed on the Hong Kong
Stock Exchange through the Shanghai Stock Exchange (“the Southbound Trading Link”) (the “Southbound Shareholders”), and
dividends for H share shareholders other than the Southbound Shareholders will be paid in Hong Kong dollars. The relevant
exchange rate will be the average of the mid-point rates of Renminbi to Hong Kong dollars as announced by the People’s Bank
of China for the week prior to the date of approval of declaration of dividends by the AGM. The record date for entitlement to
the shareholders’ rights and the relevant arrangements of dividend distribution for Southbound Shareholders are the same as
those for the Company’s H share shareholders. The proposed dividends are expected to be paid on or about 18 August 2016
upon approval at the AGM.
Further details in respect of the dividends and distribution by the Company are set out in note 14 of the audited financial
statements on page 128 of this annual report.
For the overseas resident individual shareholders of the Company, pursuant to relevant laws and regulations including the Law of
the People’s Republic of China on Individual Income Tax, the Regulations for the Implementation of the Law of the People’s
Republic of China on Individual Income Tax, and the letter dated 28 June 2011 from the State Administration of Taxation to the
Inland Revenue Department of Hong Kong, for individual H share shareholders receiving dividends who are Hong Kong or Macau
residents or whose country of domicile is a country which has entered into a tax treaty with the PRC stipulating a dividend tax
rate of 10%, the Company, as a withholding agent, is required to withhold and pay individual income tax at the rate of 10%.
For individual H share shareholders receiving dividends whose country of domicile is a country which has entered in to a tax
treaty with the PRC stipulating a dividend tax rate lower than 10%, the Company will withhold the individual income tax at a tax
rate of 10%. The Company can process applications on behalf of those shareholders to seek entitlement of the relevant agreed
preferential treatments pursuant to relevant regulations, and upon approval by the tax authorities, the extra amount of tax
withheld will be refunded. For individual H share shareholders receiving dividends whose country of domicile is a country which
has entered into a tax treaty with the PRC stipulating a dividend tax rate higher than 10% but lower than 20%, the Company
will withhold the individual income tax at the agreed-upon effective tax rate when distributing dividends and no application
procedures will be necessary. For individual H share shareholders receiving dividends whose country of domicile is a country
which has not entered into any tax treaty with the PRC or are under other situations, the Company will withhold the individual
income tax at a tax rate of 20% when distributing dividends.
For the overseas non-resident enterprise shareholders of the Company (including HKSCC Nominees Limited, corporate nominees
or trustees, or other organizations or entities that are considered non-resident enterprise shareholders), pursuant to the Law of
the People’s Republic of China on Enterprise Income Tax, the Regulations for the Implementation of the Law of the People’s
Republic of China on Enterprise Income Tax and relevant rules and regulations, as a withholding agent, the Company is required
to withhold and pay the enterprise income tax at the tax rate of 10% on behalf of the overseas non-resident enterprise
shareholders.
For the Southbound Shareholders of the Company, according to the relevant provisions under the “Notice on Tax Policies for
Shanghai-Hong Kong Stock Connect Pilot Programme (Cai Shui [2014] No. 81)”, the Company shall withhold individual income
tax at the rate of 20% with respect to dividends received by the Mainland individual investors for investing in the H shares of the
Company listed on the Hong Kong Stock Exchange through the Southbound Trading Link. In respect of the dividends for the
investment of Mainland securities investment funds in the H shares of the Company listed on Hong Kong Stock Exchange
through the Southbound Trading Link, the tax levied on dividends derived from such investment shall be ascertained by reference
to the rules applicable to the treatment of individual income tax. The Company is not required to withhold income tax on
dividends derived by the Mainland enterprise investors under the Southbound Trading Link, and such enterprises shall report the
income and make tax payment by themselves.
Should the shareholders of the H shares of the Company have any doubt in relation to the aforesaid arrangements, they are
recommended to consult their tax advisors for relevant tax impact in mainland China, Hong Kong and other countries (regions)
on the possession and disposal of the H shares of the Company.
