Making investing easier for you is one of my main drivers for having this blog. And how to claim back your foreign dividend tax by country is definitely one of those topics that fall into that category. Especially if you want to own some of the most famous European Dividend Aristocrats.
But truth be told, it isn’t easy to reclaim foreign dividend taxes even though it’s 2022. There is still a lot of paperwork involved and at the same time, every country follows a slightly different process.
But well, we have to start somewhere and we don’t give up too easily!
That’s why I wanted to start by making the very first step a little bit easier. Hence, on this page you will find:
- a list of all the European dividend tax rates by Country in Europe and North America
- a first list of countries with links to their dividend tax reclaim forms and some specifics you might need to be aware of when reclaiming dividend withholding tax
It’s a first step for now and in the future, I intend to add step-by-step instructions as per my own experiences.
I truly hope that this will make your dividend growth investing journey a bit easier again. Even if this information allows you to already make an informed decision to invest in dividend stocks from such a country in the first place.
Do I have to pay tax on foreign dividends?
Dividend tax is typically withheld at source in the foreign country. However, you may have to pay additional tax on foreign dividends when the withholding tax rate in your tax residence country is higher than the dividend withholding tax according to the avoidance of double taxation treaty. In reality, this means that most Europeans will have to pay additional dividend withholding tax on foreign dividends, but for some European countries, it may be a bit more complex than that.
Recommendation: consider checking the treaty for avoidance of double taxation (EU) between the country of your tax residence and the country in which the dividends were paid. This should give you a clear understanding of how much dividend withholding tax may be taxed in the other country (usually 15% as per OECD template) and how much you can reclaim.
Foreign Dividend Withholding Tax Rates by Country
Foreign dividend tax rates can differ a lot per country. Here are the withholding tax rates for some of the most popular countries to invest in as a dividend investor:
- Australia: 30%
- Austria: 25%
- Belgium: 30%
- Czech Republic:15%
- Canada: 25%
- Denmark: 27%
- Estonia: 20%
- Finland: 35%
- France: 12.8%
- Germany: 26.375%
- Ireland: 25%
- Italy: 26%
- Latvia: 20%
- Lithuania: 15%
- Luxembourg: 15%
- the Netherlands: 15%
- Norway: 25%
- Poland: 19%
- Portugal: 25%
- Slovakia: 35%
- Slovenia: 27.5%
- Spain: 19%
- Sweden: 30%
- Switzerland: 35%
- United Kingdom: 0%
- United States: 15%
Most foreign dividends from popular European companies are taxed higher than dividend stocks from the United States, the United Kingdom, or the Netherlands. Sometimes even up to 35% in dividend withholding tax, like is the case for Switzerland. Higher foreign dividend tax rates also apply to dividend stocks originating from countries like Canada and Australia.
Dividend Tax by Country (incl. links to the forms)
- Dividend Tax Canada
- Dividend Tax Denmark
- Dividend Tax in France
- Dividend Tax Germany
- Dividend Tax the Netherlands
- Dividend Tax Spain
- Dividend Tax in Sweden
- Dividend Tax UK (United Kingdom)
- Dividend Tax in US (United States)
Disclaimer:
(1) the information in this article should apply to the majority of readers, but sometimes I had to keep it on a general level. That’s why the information provided might not entirely apply to you as an individual.
(2) I try to keep this page up-to-date as much as possible, but I can’t guarantee that all the information provided is correct and up-to-date at the time of reading. Please contact me in case you find any incorrect information or a broken link.
Recommendation:
Always verify the information via the applicable tax authorities before making final decisions. Most of the links are available via this article.
Typical prerequisites when reclaiming foreign dividend withholding tax
These are the most common requirements when submitting a form to reclaim foreign dividend withholding tax:
- a proof of tax residence via a declaration from your home country
- a proof that dividend tax was paid in the foreign country (i.e. dividend voucher or transaction overview)
- a certificate from your bank / broker verifying that you were the owner of the shares at the time of ex-dividend
The third bullet in particular doesn’t make it easy or us as retail investors, because most low-cost brokers won’t provide you such a certificate. I will call it out (where I’m aware) that this requirement applies in the section of the particular country.
Dividend Tax Austria
The current dividend tax rate in Austria is 27.5%. Foreign dividend investors are typically eligible to reclaim a 12.5% refund according to their double taxation treaty. You can reclaim your Austrian dividend tax via this form which is according to § 27 II 1 lit. a of the EStG 1988.
Reclaiming your tax from the Austrian authority is hard because of the below requirement (see pic). Unfortunately, low-cost brokers don’t provide such documents to us or they charge exorbitant fees (i.e. IBKR). These costs typically outweigh the received dividends by small retail investors.
Dividend Tax Canada
The current dividend withholding tax rate for Canada is 25%. Foreign dividend investors are typically eligible to get a 10% refund according to their avoidance of the double taxation treaty.
Several brokers allow you to receive a pre-emptive relief through the NR301 form and this should allow an automatically applied reduced tax rate of 15%. In such case, no further dividend tax reclaim for Canada is required. This is similar to what we are used to when investing in US dividend stocks.
In any other case you would need to reclaim your Canadian withheld dividend taxes via the NR7-R form.
Having said that, you can refund excess dividend tax withheld no later thantwo yearsafterthe end of the calendar year in which the dividend income is paid.
Dividend Tax Denmark
The current Danish Dividend Withholding Tax rate is 27%. Foreign dividend investors are typically eligible to reclaim 12% according to the avoidance of double taxation treaties.
The good news it that most of you can reclaim dividends received over the last 3 years by submitting an online form. Just be aware that additional documents in the form of evidence are to be provided. Having said that, you can find all the requirements on the website of the Danish tax authority.
Dividend Tax in France
The dividend Withholding Tax for French residents is 30% and 12.8% for foreign investors in French securities. This would mean that you could reclaim 17.2% in excess dividends according to most of the avoidance of double taxation treaties.
To reclaim French dividend tax you would need to populate aForm 5000 (residence status) and aForm 5001. Not every local tax office in Europe certifies those documents and I’m not sure if exceptions for those countries are allowed.
Secondly, it is possible to already request a tax relief upfront before the dividend payment, but the low-cost brokers I have don’t support this.
Actually, I know of only one broker the automates this for you and that’s ABN Amro in the Netherlands. Check out an article from De Kleine Kapitalist (in Dutch) as evidence.
Last but not least, in most of the cases you can reclaim excess dividends withheld over the last 2 years.
Recommended Read: 5 highest yielding French dividend stocks
Dividend Tax Germany
The current dividend tax rate in Germany is 25%. On top of that, you pay a solidarity surcharge of 5.5%. Hence, the total dividend tax in Germany is 26.375%.
Germany allows you to reclaim dividend withholding tax up to 4 years from the end of the calendar year in which the dividends were paid.
Having said that, you can reclaim your German dividend tax via this form. Scroll down until you see the link as indicated in the picture below and you can open the German dividend refund form.
You can find instructions and further information on how the procedure looks on the same page. One tricky requirement is the need for a stamp from your local tax authority on the dividend reclaim submission forms.
As an example, my local tax authority in Poland doesn’t do this as the submission documents are in English. However, they could consider providing a stamp in case I would translate all 7 pages via an official translator, but this would cost more than the reclaimable German dividend withholding tax. Having said that, I’m currently in conversation with the German tax authority and it sounds like a certain declaration from the Polish tax authority could be sufficient (I’ll update this section once I know more).
Recommended Read: 5 highest yielding German dividend stocks.
Dividend Tax the Netherlands
The current dividend tax rate in the Netherlands is 15%. Most of you will therefore not be eligible for a dividend withholding tax reclaim from the Netherlands as it aligns with the rate mentioned in your avoidance of double taxation treaty. However, there are a few countries as an exception, i.e.: Great Britain, Northern Ireland, Czech Republic, and Slovakia. In those cases, 5% might be reclaimed.
Reclaiming your Dutch dividends can be done online by registering yourself first, followed by populating the reclaim form via a secure section of their website.
You should generally be able to reclaim Dutch dividend withholding tax over the last 5 years after the end of the calendar year in which the dividend income is paid.
Recommended Read: The best Dutch dividend stocks to buy in 2022 | 15 stocks to consider!
Dividend Tax Spain
The current foreign dividend withholding tax rate in Spain is 19%. In other words, most likely you are eligible to reclaim an amount of 4% in dividend tax depending on your avoidance of double taxation treaty.
Reclaiming dividend tax from Spain is not made easy and feels awkward. I understood that in some cases you will also need a local Spanish tax representative to file the reclaim for you. However, the Spanish Tax Authority also allows you to register for an online ID. This in return allows you to populate a pre-declaration 210 form.
It’s my understanding that you are eligible to ask for a refund on the excess of dividend withholding tax paid for a period of 4 years.
Check this instruction (in English!) to learn more about the procedure.
Recommended Read: Red Electrica stock analysis | Enagas stock analysis
Dividend Tax in Sweden
The current foreign dividend tax rate in Sweden is 30% for non-residents. Most of you will therefore be eligible to reclaim 15% in excess dividends depending on your avoidance of double taxation treaty.
Non-residents can request a refund by submitting a SKV 3740 form via post (SKV 3742 for Swiss residents). The main requirements for reclaiming Swedish dividend tax are certificates of dividend payments and a declaration of tax residence by your local tax authority.
The good news, you can reclaim excess dividends for the last 5 years from the end of the calendar year in which the dividends
were paid. More information about reclaiming dividend tax is available on the Swedish tax authority website.
Dividend Tax UK (United Kingdom)
The current dividend tax rate in the United Kingdom or non-residents is 0%. Hence, a dividend tax reclaim might not be needed by you.
More information can be found on the British tax authority website.
Dividend Tax in US (United States)
The current dividend tax rate in the United States for foreigners is 30%. Luckily almost every low-cost broker I know allows us to digitally complete the W-8BEN[PDF] in advance. This means you will not require to reclaim your dividends afterwards and you will benefit from the reduced tax rate of 15%.
However, if you weren’t able to benefit of this for whatever reason, then you can still complete a US income tax return to reclaim your dividends. Most of you will be able to do this by completing a 1040-NR form.
More information can be found at the website of the IRS.
Summary
I hope you found this article helpful. Even if it was just the list with dividend tax by country so that it can guide you on which countries to avoid.
Actually, I think most of you are probably already discouraged by the amount of paperwork required to reclaim those foreign dividend taxes. There is some hope though because the EU is already working on this since 2004 and most recently they closed consultation for an EU-wide system for withholding tax relief. Fingers crossed that anything meaningful will come out of this for us as retail investors.
Having said that, I hope you found this information useful 🙏
But as you probably know, I don’t have personal experience with the dividend tax reclaim processes of most of these countries.
Hence, I would love to hear from you if you do, so feel free to share with me your experience in the comment section below. Also, if there are any additional “good-to-be-aware-off’s” then I’m more than happy to include those in this article.
Yours Truly and At Your Service,
European Dividend Growth Investor
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