Incorrect dividend?

Hello there,

I recently received my first divided (WOOHOO!) from Bayer on Thursday. I got a deposit from Trading212 of €2.06.

However, Bayer’s dividend for 2020 was €2.80/share, and the number of shares of Bayer that I own is 1.

My question is: where did those €0.74 (which is ~26.43% of the original dividend) go to? This being a German company, it shouldn’t count for tax, should it?

Thanks in advance.

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Hi @wdavis,

There was discussion about dividend and taxes, I seen Bayer mentioned as well. As I don’t own German companies I never researched for witholding tax.

But i think they mentioned it:

You should have under Bayer > History > Dividend, details about how much was payable…

Difference between Payable and declared should/might be witholding tax…

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Hello @Vedran, thanks for your answer.

I don’t really understand this. Bayer issued a €2.80 dividend per share and I got €2.06 for one share. I live in Spain so I don’t understand why that UK taxable amount would be charged to me.

Could you elaborate on this please? Thanks again!

Google has the answer:

What is the German Withholding Tax (“WHT”)?

Germany applies a withholding tax on dividends paid to investors of German securities at a current rate of 25% with an additional “solidarity surcharge” of 5.5% of the 25% withheld.

The net effective rate of taxation on the dividend is therefore 26.375%. Tax rates are subject to change. BNY Mellon as Depositary Bank (“the Depositary Bank”) will provide withholding tax rates in their dividend notices to the market.

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Thanks @Richard.W. Would that mean that I would have to pay an extra tax amount to Spain over the dividend that I received?

I do not know about Spanish taxation. However, if it as with the UK then I would expect the German tax paid to be allowable as a deduction against any Spanish tax owed. Some searches with Google should turn up the answer for you.

Thank you @Richard.W, I’ll try to find stuff on Google but unfortunately Spanish taxation is very confusing and obscure to me :slight_smile:

Actually @Richard.W, I just found that there is an percentage of tax that’s charged depending on where the company is from before it’s handed out to foreign shareholders:

  • :es:: 15%
  • :uk:: 0%
  • :de:: 27%
  • :us:: 15%

Well I have been familiar with French taxation. T212 as UK entity was taxed full witholding tax(28%? Or similar) even tho we as EU citizens have benefits from dual taxation, so should be taxed 15% or based on treaty.

Solution for this issue was to buy stock on LSE if possible. Until T212 can solve this issue.

So for time being, request all EU stocks if possible listed on LSE to avoid witholding tax.

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Thank you @Vedran.

N00b question: if I live in Spain and own Spanish stock (eg BBVA) which is in the Madrid Stock Exchange, would that withholding tax that you mentioned still apply considering that T212 is based in the UK?

If Spain charges witholding tax, than sadly yes.

Here is the topic::

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Thank you so much @Vedran! This is a huge blow since a huge chunk of my portfolio is comprised of German and Spanish stocks. Maybe it’s time to rebalance it. Thanks again!

How can T212 charge maximum taxes on dividends when they are not buying stocks for themselsfs, T212 is not owner of stocks, but for customers that are living in different countries? Every country especialy in EU has mutual agreements with other countries about avoiding double taxation like with USA. If the maximum tax witholding on noresidents in USA is 15% on dividends and no taxation on gains with stocks that must be also the same between countries in EU. You have to make taxations according the coutry of residency of the stock holder and the residency of the company that shers dividends. Also some coutries do not have taxes on dividends other does and with mutual agreements taxes on stocks are in that cases usualy 10% or 15%…All of this mentioned above have to be correctly managed according the country of residancy of sharholders and company. That is also the reason why you have to make correct dividend reports wher will be shown bruto value of dividends and amount of taxes that have been payed and all of that must be in orriginal currancy. That is a must to be done as soon as possible, not in this year but in this month. Othervise there is no sense for buying stocks if T212 will charge maximum taxes on dividends.

@Gep75 Well USA stocks are taxed correct, UK doesn’t charge witholding tax. So confirmed are French companies taxed 28%(should be 10-15% via dual taxation treaty).

Possibly Germany also… Not sure if others are problematic…

Here is a agreement bettween UK and Slovenia about avoiding double taxation:

@Gep75 Unfortunately, you are asking for something no broker provides. This is not just a Trading 212 problem. Compare the advice given by the huge premium-fee Hargreaves Lansdown to those who use their platform. (If anyone should be able to admister dividend double taxation arrangements then they should.) However, they warn, “Due to the complexity of the tax regimes in other countries, HL Asset Management will not generally reclaim tax credits on dividends or other income on foreign securities.” Similarly, AJ Bell advise, “No, we do not offer a foreign withholding tax reclaim service”.

It is possible for a UK investor to reclaim German tax from the German tax authorities, reducing it to 15%, which equals the amount allowable as a credit against UK tax. Similarly, it can be done for France, Spain, etc. However, people complain that the paperwork is difficult. I have no experience of attempting this myself. Perhaps others do and can comment. See

The US has the most favourable dividend withholding tax arrangement for investors, Again, HL “However, if you have provided us with a valid W-8BEN form, we will claim reduced withholding tax payments from US or Canadian stocks, whenever possible.”

The UK also has a favourable regime as it charges 0% withholding tax on dividends. Germany, France, etc do seem to operate less investor-friendly dividend withholding tax regimes.

Remember that withholding taxes are also being charged to ETF providers. So if you hold EXS1 iShares Core DAX you are effectively paying the German withholding taxes without any possibility of a tax reclaim or credit against UK tax. EXS1 has yield of just 0.80% whereas the gross yield of DAX is over 3%. Withholding tax contributes to the difference.

A UK investor can take a credit of 15% against the German tax of 26.375%. For a UK higher rate taxpayer that would leave a dividend tax on 100 euros of 26.375 - 15 + 32.5 = 43.875. After completing paperwork with German tax authorities it could be reduced to 32.5. A basic rate taxpayer would end up paying 26.375 since there would be no additional UK tax, or 15% after make a reclaim.

I found this illuminating

But I guess it is for UK investors?

In fact because your shares are being held in a nominee account you are being charged less than it might be if you held them in your own name.

“Germany charges investors who hold stocks directly in their own names 30 per cent withholding tax and nominee accounts 26.375 per cent withholding tax.”

The link worked for me without subscribing. Here is most of the content for you.

"Many countries apply a withholding tax to dividends paid in respect of direct investments held by non-residents. The tax is automatically deducted before the investors receive the dividends. However, the UK has double taxation treaties with many countries to prevent UK investors having to pay tax twice on the same income. This allows investors to claim relief in respect of the foreign tax they have paid, and get some or all of the amount they paid back, so they only have to pay UK tax (or not much more) on those investments.

France and the US typically charge private investors who hold stocks directly in their own name and in nominee accounts 30 per cent withholding tax. Germany charges investors who hold stocks directly in their own names 30 per cent withholding tax and nominee accounts 26.375 per cent withholding tax. But because these countries have double taxation treaties with the UK, investors here can claim a rebate so the most they pay the foreign authority is 15 per cent.

Investors can either claim tax back from the relevant country’s tax authority after the tax deduction has already been made or request that it is not taken before it is deducted.

You will need to send three copies of your claim form to UK HM Revenue & Customs, which stamps them to prove that you are tax resident in this country. It keeps one, and you send the other two to the foreign country’s tax authorities for processing. It can take two to three months to get the money. There are different forms for each country. For example, for France this is Form 5000 and for the US it is the W-8BEN form. Some ask you to send a dividend summary, whereas others request the original dividend vouchers.

If you want to avoid this process you can make a claim before receiving dividends so that you do not pay withholding tax in the first place. You can do this by writing to the registrar of the company whose shares you hold, and request that they apply the treaty tax rates to your dividends every time. But finding a registrar or portfolio handler who is willing to do this is generally more difficult due to the administration involved."

Sounds to me like for the small investor treaty-based double taxation relief is more theoretical than practical in the cases of France and Germany. Only the US makes it easy.

I expect almost all small investor just have to put up with the high double taxes on their German and French shares.