Dividend Tax

Do you intend to issue (a portion of) your company profits to shareholders? Dividend payments are subject to tax, and you are obliged to withhold and pay Dividend Tax on the profits. Exceptions may apply in some instances. Cross-border relationships may also be subject to different rules. Need help with distributing your company’s profits? Or would you prefer us to check your Dividend Tax return for you? Let us know. We have in-house specialists in all areas.

Deciding on the amount of the dividend

The company board decides the amount of dividend to be distributed, which must be approved by the shareholders’ meeting. When deciding on the amount, it’s important to apply the statutory distribution test. In some cases, smaller corporations may not keep good records of this. Avoid problems and call on the experts. We’d love to help!

Distributing dividend payments

If a business distributes dividend payments to shareholders, the company is subject to Dividend Tax at a general rate of 15%. Companies must file and pay this tax within a month after distributing the dividend to shareholders. Our advice: make sure that everything is thoroughly prepared, and file your tax return and pay your tax bill on time, to avoid an additional tax assessment.

Receiving a dividend payment

If you receive a dividend payment, a tax of 25% is payable on the gross payment amount. This off-sets the Dividend Tax that has been withheld (paid by the company). You do this when you file your income tax and/or company tax return. You state the gross amount of your dividend payment and the amount of Dividend Tax that’s been retained by the company on your tax return. You pay the remaining part of the tax.

Calculating Dividend Tax

Imagine you are a shareholder and the company will pay you a dividend of € 1.000. The business retains € 150, which it pays directly to the tax office. The remainder is transferred to your bank account. You need to pay 25% Dividend Tax on the gross dividend amount (in this case, € 250). The corporation has already paid € 150. This means that you pay the amount left over, which amounts to Є 100. Do you have questions? Then get in touch. We’d love to help you.

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NAHV Belastingadviseurs is the finance and accountancy firm where you can ask the questions you never dared to ask. We specialise in tax and administrative solutions, and financial advice for (creative) entrepreneurs. We have over 3,500 regular clients ranging from artists, to journalists, architects and many other professionals and companies in the creative and cultural sector, as well as lawyers, independent contractors in the construction sector, physiotherapists and countless other professions. Whether you’re a freelancer or self-employed professional, director and major shareholder of a private limited company or a general partnership, we help everyone.

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