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Tax-free dividends because of double payment?

Personal Finance & Money Asked by BeschtPlaier on December 24, 2020

I have just received a dividend of 0.11 $, from which 15% withholding tax was deducted.
On the same day I received a dividend of 3,40$ from the same company, but without paying withholding tax. (for 3 shares)

Why is the big payment tax-free? And why don’t all companies do it like that?

FYI I am in Germany and the company is located in the US.

Edit (adding some more info):

Bill no.1

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Bill no.2

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As you can see, in the 2nd payment I didn’t pay withholding tax (Quellsteuer). (Yes I still "payed" Kapitalsteuer, but I still saved the 15% withholding tax)

One Answer

You provided no specific information so I can only guess what might have happened.

It's possible that you received a special dividend and a regular dividend. Regularly scheduled dividends are considered to be earnings distributions and therefore taxable as ordinary income. Whether a special dividend is taxable or not depends on how the company classifies the special dividend.

And there's always the possibility that your broker made a mistake.

Google for details or call your broker.

Answered by Bob Baerker on December 24, 2020

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