What do I need to consider when it comes to taxing dividends?
January 12, 2024 | 40,00 EUR | answered by Anna Karpinski
Dear tax advisor for capital assets,
My name is Emilia Albrecht and I am currently dealing with the topic of the taxation of dividends. In the past, I have regularly received dividends from my stock investments, but I am unsure how to handle them tax-wise.
I am currently in a situation where I am not exactly sure which tax aspects to consider when it comes to the taxation of dividends. I am worried that I may make mistakes in my tax return and end up in conflict with the tax office.
My question to you as an expert is: What specific steps do I need to take when it comes to the taxation of dividends and what particularities are there regarding the taxation of capital gains? Are there possibly ways to save taxes or optimize my tax burden?
I would greatly appreciate a detailed explanation and assistance on this topic so that I can fulfill my tax obligations correctly and avoid any financial disadvantages.
Thank you in advance for your support.
Best regards,
Emilia Albrecht
Dear Mrs. Albrecht,
Thank you for your inquiry regarding the taxation of dividends. It is understandable that you may feel uncertain when it comes to the tax treatment of capital gains. I will now explain in detail the steps you should take when it comes to the taxation of dividends and any particularities to consider.
First and foremost, it is important to know that dividends received from your stock investments are generally considered capital gains and are therefore subject to the flat-rate withholding tax. The withholding tax currently amounts to 25% plus solidarity surcharge and, if applicable, church tax. This tax is directly withheld by the bank and remitted to the tax office. Therefore, you do not have to pay the tax yourself, as your bank takes care of this for you.
However, there is also the option to submit a tax exemption order to your bank. With this order, you can specify a certain amount up to which your capital gains should remain tax-free. This can help optimize your tax burden and save on taxes. Please note that the tax exemption order applies per bank and per person. So if you have accounts at multiple banks, you should divide the tax exemption accordingly.
Furthermore, there is the possibility to offset losses from capital investments with gains. So if you incur losses in a year, these can be offset against your dividend income to reduce the tax burden. However, there are certain regulations to consider in this case as well, so I recommend that you get detailed information on this from your tax advisor or tax office.
Lastly, I advise you to carefully keep all relevant documents and receipts concerning your capital gains and to diligently fill out your tax return. If you are unsure or have any questions, do not hesitate to consult a tax advisor.
I hope this information helps you and allows you to fulfill your tax obligations correctly. If you have any further questions, I am at your disposal.
Best regards,
Anna Karpinski
Tax advisor for capital assets
