1. Principles
For persons residing or normally living in the Federal Republic of Germany, dividends received from the company are subject to German taxation. The dividends are taxed at a flat witholding tax rate of 25 %, which must be withheld at source by the bank. A solidarity surcharge (5.5 % of the flat withholding tax) and church tax, if applicable, (8 % or 9 % of the final withholding tax, depending on the location) is added. The flat withholding tax is the final tax.
The dividend income taxed at source does not have to be declared in the German income tax return. However, if the investment income was not subject to the flat tax withholding at source, the dividend income must be declared in the tax return. Taxpayers with an average personal income tax rate below 25 % can apply the lower tax rate to the investment income that is declared in the German income tax return.
1.1. Privately owned stock
The dividend should be shown separately in the declaration of capital gains. In the case of capital gains for 2012, a tax-free amount of EUR 801 (single persons) / EUR 1,602 (jointly taxed married couples).
1.2. Company-owned stock
The dividend is regarded as business income. The retained withholding tax and retained solidarity surcharge are offset against the income tax or corporation tax owed by the stockholder.
2. Payment of the dividend
2.1. In the absence or either a tax relief instruction or tax exemption certificate
The custodian bank pays the dividend to the stockholders deducting 25% withholding tax and 5.5% solidarity surcharge.
|
|
1 Share |
1,000 Shares |
|
Dividend per share |
|
2.20 Euro |
2,200.00 Euro |
|
less withholding tax |
25% |
-0.55 Euro |
-550.00 Euro |
|
less solidarity supplement on the withholding tax |
5,5% of 25% |
-0.03 Euro |
-30.25 Euro |
|
Payment |
|
1.62 Euro |
1,619.75 Euro |
The stockholder can file an application for a single tax voucher („Einzelsteuerbescheinigung”) at the custodian bank showing the retained withholding tax and solidarity surcharge if the stockholder wants to apply for a reimbursement with the Bundeszentralamt für Steuern.
2.2. There is an adequate tax relief instruction or a tax exemption certificate.
The custodian bank pays the stockholder the dividend without deducting withholding tax or the solidarity supplement.
|
|
1 Share |
1,000 Shares |
|
Dividend |
|
2.20 Euro |
2,200.00 Euro |
|
Payment |
|
2.00 Euro |
2,200.00 Euro |