1. Principles
For persons residing or normally living in the Federal Republic of Germany, dividends received from the company are subject to German taxation. Tax is due on 60 % of the dividend (“Teileinkünfteverfahren”).
The withholding tax retained on payment of the dividend is deducted from the personal income tax or corporation tax payable by the stockholder. Should this amount exceed the personal income tax or corporation tax due, the excess amount is repaid.
The German solidarity supplement retained on payment of the dividend is deducted from the solidarity supplement owed by the stockholder. Should the deducted solidarity supplement exceed the solidarity supplement owed, the excess amount is repaid.
1.1. Privately owned stock
The dividend should be shown separately in the declaration of capital gains. In the case of capital gains for 2010, 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 supplement 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 supplement.
|
|
1 Share |
1,000 Shares |
|
Dividend per share |
|
1.85 Euro |
1,850.00 Euro |
|
less withholding tax |
25% |
-0.46Euro |
-462.50 Euro |
|
less solidarity supplement on the withholding tax |
5,5% of 25% |
-0.025 Euro |
-25.44 Euro |
|
Payment |
|
1.37 Euro |
1,362.06 Euro |
The custodian bank provides the stockholder with a certificate showing the retained withholding tax and solidarity supplement.
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 |
|
1.85 Euro |
1,850.00 Euro |
|
Payment |
|
1.85 Euro |
1,850.00 Euro |
2.3. Stock Certificates
It was possible to issue stock in certificate form until August 2007. If stock certificates are held the stockholder is unable to issue a tax relief instruction for this stock and withholding tax / solidarity supplement is always retained. The retained taxes are offset against the stockholder's total tax liability.
Together with the dividend cheque from the company the owner of stock certificates receives a statement of account which may be presented to the fiscal authorities as a tax certificate.
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