What is the current dividend distribution tax
That's how much dividend tax shareholders pay in Germany
The dividend tax is nothing else than the final withholding tax. It is the tax that must be paid on dividends that a company pays to its shareholders. Since dividends count as income, shareholders must pay tax on this sum. Dividends are to be classified as investment income that is taxed at a flat rate with the flat rate tax, the rules of this tax apply. Exchange rate and capital gains as well as interest income also fall under investment income and thus under the withholding tax.
The withholding tax or dividend tax in Germany is a flat rate of 25%. In addition, there is a solidarity surcharge of 5.5% and the church tax, which, however, varies from taxpayer to taxpayer. The tax exemption is € 801 for single persons and € 1,602 for married couples.
Dividend taxes in Germany - a practical example
In the case of a dividend of € 1,000 for a single person, € 199 must also be taxed with dividend tax. This tax is then a flat rate of € 49.75, which goes to the tax authorities. The solidarity surcharge is calculated depending on the tax burden and amounts to € 2.73 with a dividend tax of € 49.75. For the church, depending on the federal state, 8 or 9% of the tax burden is estimated, i.e. 8 or 9% of € 49.75. At 8% the church tax is then € 3.98 and at 9% € 4.47.
For the taxpayer, the following picture emerges from all these amounts: With a dividend of € 1,000 and 8% church tax, a total of € 56.46 is due, with 9% church tax it is € 56.95 and the shareholder is not in the church , he has to pay dividend tax of € 52.48 to the German state. For married people, a dividend of € 1,000 would be tax-free, as their tax exemption is twice as high as that of single people.
Investors do not have to pay dividend tax themselves
Dividends are usually distributed one day after the company's general meeting. However, shareholders do not have to worry about dividend tax themselves. The dividend tax is withheld by the paying institution and paid to the tax office.
For the investors, there is no need for the calculation and the transfer, instead they receive the dividend, reduced by the taxes, directly. The dividend tax applies in Germany to all dividends since January 1, 2009.
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