Dividend income is generally effectively 95% exempt
As a result of the various additions and reductions relating to
dividends, dividend income is generally effectively 95% exempt
from trade tax at the level of a corporation if the receiving cor-
poration has a shareholding of at least 15% in the corporation
paying the dividend. If the holding is less than 15% (10% in case
the EU Parent-Subsidiary Directive is applicable), the dividend
(less the expenses relating to the dividend which were non-de-
ductible for corporate income tax purposes) must be added back
for trade tax purposes.
Since this threshold must be met at the
beginning of the calendar year, dividend income arising in the
year the shareholding is acquired is subject to trade tax. Gains on
the sale of shares in a corporation are also de facto 95% exempt
from trade tax.
EU Forecast
euf:ba.18g:43/nws-01