Key Post The taxation of dividends from German companies

Brendan Burgess

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(Thanks to Gordon Gekko for correcting an earlier version of this.)

When you get a dividend from a German company through your Irish stockbroker, you should get a dividend certificate as follows:

Gross dividend: €100
German tax deducted: €26.375
Net German dividend: €73.625
Encashment tax :€14.725 [ 20% of net German Dividend] (On some occasions, the broker did not deduct this tax.)
Net dividend: €58.90



You paid €26.375 in German withholding tax.
You are entitled to claim a credit for €15 in your Irish tax return.(15% of the dividend.)
You must claim the balance of €11.375 from the German tax authorities

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On your Irish tax return
There is a box which is very misleading which says "amount of foreign tax deducted". You don't actually put in €26.29 . You put in only €15.

In a separate box, you put in the encashment tax of €14.74

To claim the German tax

See below for links and detailed instructions.

Send it to the Income Tax section of your own local Revenue District. ( There is no special office.)
They will certify it and send it back to you.
Send it to the German address on the form.

Notes

The copy certified correct by the authority should be forwarded by the claimant to the Bundesamt für Finanzen by the end of the fourth calendar year following that in which the dividends and/or interest have been received.

So for Dividends received in 2013, the claim must be submitted by the end of 2017.

Fill in your bank details as the money is transferred.
Make sure to sign it.
Keep copies of all the documentation - the dividend certs and the Revenue's certification of the claim in case the whole lot goes missing in the Irish Revenue or the German Revenue.
 

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I submitted a claim a few weeks after the 4 year deadline and they refused me a refund.

I submitted a claim over a year ago well within the time limit and they are still processing it.

Brendan
 
I have some shares in Siemens. I have applied for a tax refund for dividend income in 2017. The German tax authorities have confirmed receipt of my application but I have not received any refund yet.



I can’t find the form anywhere. Does anyone know where I might get the original form?
 
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Hi Matt

I am waiting over 18 months for a refund. They have acknowledged receipt of the claim and have told me that there is a backlog.

Brendan
 
I have some shares in Siemens. I have applied for a tax refund for dividend income in 2017. The German tax authorities have confirmed receipt of my application but I have not received any refund yet.

The link that I used here has changed

Before it gave a 3 page form as per Brendan post (the German shares you have, the amount of dividends received, and a page for the Irish revenue to stamp).
Now the page that the link brings up is for refunds for residents of Bolivia, Mongolia, China etc.

I have contacted the German tax authorities to ask how a resident in a European country claims back withholding tax from the German tax revenue under the double tax EU agreement and they have sent me to this page - http://www.bzst.de/EN/Home/home_node.html

I can’t find the form anywhere. Does anyone know where I might get the original form?

Just an update. I have now received the tax refund for 2017 from the German tax authorities.

The forms to claim the tax refund are available in German and English - https://www.formulare-bfinv.de/ffw/form/display.do?$context=7B6BC7AE27E1F242690D
 
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The refund forms are now found under https://www.bzst.de/EN/Businesses/C...efund_procedure_pursuant_50d_1_estg_node.html

Scrool down the page to the Refund from section.
Click on the 1st form "Application for refund of German capital income tax"
This should bring you to a page entitled "Application for reimbursement of German tax on investment income". Click on the agreement in the drop down box and then in the drop down box under this scrool down to Ireland and click on this.
Then in the box under this click on "natural person".
The form should then come up.
Put in your details. It is saved in triplicate.
Print it out. There should be 3 copies - 1 for you, 1 for the Irish Revenue and one for the German tax man.
 
Hello MattMacG

I am trying to fill up the tax refund form.
did you get your tax authority to sign in section VII?

VII. Certification by the tax authority of the applicant’s country of residence/establishment
We hereby confirm that the applicant was established/resident or had his/her habitual abode or registered
office or place of management as specified under section I at the time of receiving the capital income (as
detailed in section IX, column d) and was therefore covered by the relevant agreement / had his/her
registered office there.
 
I send the forms to my local tax office, ask for a signature and return of forms. They usually do this quickly and return all the forms, including the one for Irish revenue!
 
OK, I am going through this, so will document my experience

1) The form is here which brings you to

1621243059754.png

2) Click on the Union Jack
3) Click on the drop down arrow to the right and select

DIAs/other bilateral etc...

4) Select Ireland from the drop down menu

5) Select Applicant's legal status: Natural Person

The bits on the form with might cause a problem

1621243624325.png
 
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V. You can't fill this in. It's filled in automatically from Section IX

IX
ISIN - Google it - Siemens is DE DE0007236101
Number of shares: Don't forget that Where we might write 2,000 , they write 2.000
Gross income received: Getting the format 1.345,66 is critical

Withholding tax, once you click on this box you get an error message
1621245136702.png

Click ok and then enter the figure

Withhold tax - It will be rejected if the format is not correct

Withholding tax and solidarity surcharge refund applied for: I am guessing 11.375%
 
Folks, is this still correct?

1621245828990.png

The last time I did it a few years ago, they didn't give me the full 11.375 but I never understood why.

On filling in the form, it allows me to put in any percentage I like.
 
The German terminology is confusing. They refer to Capital Gains when I think that they mean dividends.

Capital income is subject to a flat rate tax of 25% for private investors. In addition to this, investors will have to pay the so-called "solidarity" surcharge of currently 5.5% on the capital gains tax, i.e. 26.375%.
 
Yes, it is confusing - I suppose in the original German it is probably clearer.

The solidarity surcharge tax is odd - it's 5.5% of the tax - a tax on a tax so to speak

But that look right to me. I have € 17 to reclaim for 2020 - not sure it is worth my time :rolleyes:
 
Yes - looks good. I presume you have to enter the number of shares and date so that they can check the amount if they were bothered to.

Do you need it signed by Irish Revenue? by the broker/account manager?

I can't remember - being German, they probably assume everyone is following the rules.
I presume the broker has to supply a list each year of amounts deducted and on whose account when they pay over the deductions

The French broker used to process my French reclaim in the days when they deducted 25% so I had no dealing with the French tax authorities other than downloading the form.
 
Campbell O'Connor send me a paper Cash Dividend Tax Certificate.

Last June, I asked Davy's for the equivalent for dividends received in February and May 2020.

They told me that I had to wait until after the year end and get a "tax package" from them.

I did not get that. I phoned them today and they don't know why I haven't got it. They will see about adding it to my account later today.

As I understand it.
1) I complete the form online.
2) Print it off and get Irish Revenue to stamp it.
3) Send the paper form and the dividend certs to Germany
Wait two years
4) Find the money in my bank account.

Brendan
 
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I wonder how many small shareholders with small amounts to reclaim can't be bothered?
 
I have a number of online broker platform accounts, the only dividend "certificates" available are annual lists of all my dividends paid via each platform. These are not certificates in the sense of paper confirmation from company X that it has has paid amount Y less tax to shareholder Z, although this information can be derived from such lists; the certification - such as it is - is from the brokers not the companies. Can such lists be used to support a German claim?

A German refund may alter the foreign dividends and the Effective Rate calculations in my Irish tax return so I probably would not go back before 2020.
 
I got this email from German Revenue which did not directly answer my question on what rate to claim. But it's interesting otherwise. The guide they sent is attached to this post.

Domestic dividends and certain other capital gains are subject to an obligation to withhold capital yields tax in an amount of 25 % plus a solidarity surcharge of 5.5 %. Recipients of these payments based abroad can receive full or partial relief from deduction at source by means of an application on the basis of a double taxation agreement or Section 43b of the Income Tax Act (EStG) or Section 44a (9) EStG. This relief is achieved either by means of refunding the withheld taxes or exemption of future payments from tax withholding.

In order to claim for refund of German capital gains tax you must send a special application via normal letter post to us and we also need the original tax certificates on which is written how much capital gains taxes and solidary taxes you have paid.

The form Application for refund of German capital income tax (de/en) is available in German or English (when you click the English or German flag) on the following website www.bzst.de/EN > Private individuals > Capital Yield Tax Relief > Written application procedure > Refund procedure Section 50d (1) EStG > Refund forms Form 010005.
Only the yellow marked fields are mandatory fields.

In general, we need the certificate of residence on the application. But due to the Pandemic we also accept a separate original certificate of residence.

Please send the filled and signed application with the orignal signatures and the original tax certificate, on which is written how much capital gains tax and solidary tax you have paid, with normal letter post to:

Bundeszentralamt für Steuern
Referat St I B 3
53221 Bonn
Deutschland

The period for refund allowed for filing a request is four years (cf. Income Tax Act § 50d Subsection 1 Sentence 9), and it commences at the close of the calendar year during which the returns on capital were received, i.e. were paid out to the creditor.
https://www.bzst.de/EN/Businesses/C...efund_procedure_pursuant_50d_1_estg_node.html

Note, we don't give acknowledgments of receipt and each application will be handled after the temporal receipt.

The withholding tax, which cannot be refunded, due to the Double Tax Agreement (15 percent), can be credited as paid taxes in your national income tax return.

Please find the explanatory notes (in this moment only in German) in the attachment.
The document "Important explanations" in English language is currently being revised.
 

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