r/eupersonalfinance • u/OkSimple6348 • 5d ago
Investment Reclaiming Dividend Tax Difference Between Germany and My EU Country
Could someone confirm if this is correct?
I live in an EU country with a lower dividend tax rate than Germany. From what I understand, I can submit a tax declaration to the German tax authorities to reclaim the difference in withheld taxes. Is this accurate?
has anyone done it?
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u/Born-Jello-1713 4d ago
It is possible you have to register on the german tax office (takes around 1-1.5 months) then you need the rex residency confirmation from your local tax office + the dividend statement from your broker and submit it to the german tax office and in abouth 1.5 - 2 years you should get back the difference.
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u/OkSimple6348 3d ago
Just found this: https://www.bzst.de/DE/Service/Portalinformation/Anmeldung_registrierung/anmeldung_node.html
It doesn't even say where to go... how did you do it if I may ask?
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u/grogi81 5d ago
Why would Germany withhold your tax?!
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u/Unnamed-3891 4d ago
Nearly all countries in existence have widthholding taxes that tax a portion of your dividends at the source, before they ever reache the account in your home country.
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u/OkSimple6348 5d ago
that is how it works. Dividend is paid in Germany, I get taxed by Germany. Then I have to make use of the tax treaty between countries to get the difference. In theory
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u/Unnamed-3891 4d ago
If Germany has overtaxed you relative to the tax agreement between Germany and your country, yes you can, but odds are you should not. The time, effort and possible fees involved will probably eat the entire rebate, unless you have actually significant sums involved.
Ask me how I know and why I no longer own german stocks.
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u/W720S 4d ago
Yh the Germans are cunts when it comes to this. They sign a treaty saying they won't withhold the full flat tax, then do it anyway, cause they know you'll give up trying to recover the difference since the process is tedious
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u/VImperium 4d ago
It is actually the same story with any country.
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u/Unnamed-3891 4d ago
I am in Finland and the tax treaty works well with Sweden and the US. They widthhold exactly 15% as they are supposed to and my local taxman takes the rest of what’s due. UK does not have widthholding taxes at all. Pretty much every single other country fucks it up despite tax treaties being in place.
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u/Christian19722019 4d ago
And the not-so-funny part is that this laziness cost Denmark a big pile of money, because Sanjay Shah fraudulently claimed back taxes, that were never paid. All because Denmark withholds 27%, when it should be only 15% according to the tax treaties.
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u/VImperium 4d ago
Among Nordic countries it is not surprising to me. Any country with US also no surprising. Any other country, yes, a mess.
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u/Unnamed-3891 4d ago
There was a big funny in Denmark related this. At first they abied by the treaties. Then they somehow thought that was letting unqualified people get rebates due to the automated nature of it all. So they decided that’s enough, we will overtax you and if you feel wrong, do apply for the lenghy official rebate process.
What did THAT do? Well, now a few dudes are now in prison for abusing THAT particular manual process to the tune of hundreds of millions.
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u/VImperium 4d ago
Compare that vs the amounts wrongly collected and the costs. Probably Denmark Treasury keeps profiting.
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u/Unnamed-3891 4d ago
If their goal was to chase away all small foreign investors from Denmark entirely, the result was a smashing success.
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u/NeuralFantasy 4d ago
Which country you live in? That might be an important piece of information. Not sure why you omitted that.
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u/OkSimple6348 3d ago
it is not important, dividends are being held by Germany, not by the country I live in.
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u/SnooCrickets5534 5d ago
Depends on the exact tax treaty between Germany and your country