How will the dividend be taxed?
As of 1 January 2009, dividend payments to domestic resident shareholders (i.e. investors with a permanent domicile or primary residence in Germany), who are natural persons and whose shares are privately owned, are taxed with a flat withholding tax rate of 25% plus solidarity surcharge and, where applicable, church tax. The flat tax charge is independent of the personal income tax rate and has a compensation effect (so-called flat rate withholding tax). The company paying out dividends has to withhold the capital gains tax plus solidarity surcharge and pay these to the German tax authorities. The shareholder receives a tax certificate of the withheld amounts from his or her depository bank which pays out the dividend. Please note that these explanations are merely of a general and basic nature and do not replace individual advice. Shareholders should principally consult a tax advisor for individual tax advice.
