(Yicai) Sept. 11 -- Yangtze Optical Fibre and Cable Joint Stock, a global leader in optical fiber and cable manufacturing, said it will start taxing dividends and bonuses earned by foreign individuals, becoming the first listed company to announce such plans after China ended a 30-year tax exemption for foreign-invested businesses in the country.

Under the new tax policy that took effect on Sept. 1, YOFC will comply with relevant laws and regulations by withholding and paying individual income tax on interim dividends planned for distribution to foreign shareholders, the Wuhan-based company announced yesterday.

Foreign-invested enterprises that pay interest, dividends, and bonuses to foreigners must withhold a standard 20 percent levy and file the returns by the 15th day of the following month, the Ministry of Finance and the State Taxation Administration said on Sept. 1. If a business fails to withhold the tax, then the beneficiary must pay it by June 30 of the following year.

YOFC plans to pay an interim dividend of CNY1.06 (16 US cents) per share, totaling CNY877.6 million (USD130.8 million), with the payment date set for Nov. 10, the company said in a financial report last month.

China introduced the tax exemption in 1994 to encourage foreign investment, Ge Yuyu, associate professor at the Shanghai National Accounting Institute, previously told Yicai. As the economy and society have developed, the tax system puts greater emphasis on fairness and uniformity, Ge said, adding that removing the preferential policy will also help close loopholes that some individuals were able to exploit to avoid taxes by changing their nationality.

Established in 1988, YOFC has ranked first in global sales of optical fiber preforms, optical fibers, and optical cables for several years. Thanks to rapid growth in demand for optical fibers driven by artificial intelligence advances, its net profit surged 889 percent to CNY2.9 billion (USD432.2 million) in the first half of this year from a year earlier, while revenue jumped 54 percent to CNY9.8 billion.

Shares of YOFC [SHA: 601869] closed 8.8 percent higher at CNY473.99 (USD70.68) each in Shanghai today. Its Hong Kong-listed stock [HKG: 6869] rose 3.4 percent to HKD183.50 (USD23.4).

Editors: Dou Shicong, Martin Kadiev