How dividend tax works in Germany
German-source dividends are normally subject to withholding tax at source. The standard tax is 25% capital income tax plus 5.5% solidarity surcharge, and church tax may also apply depending on the shareholder’s religion and state.
The saver allowance of EUR 1,000 per person, or EUR 2,000 for joint filers, applies to total capital income. Many resident investors pay nothing on small portfolios once the allowance is used.
Foreign dividends can still be taxed in Germany, but the real issue is often foreign withholding tax, treaty relief and foreign tax credits rather than just the German flat rate.
Tax rates at a glance
- Dividend withholding tax
- 25%Abgeltungsteuer
- Solidarity surcharge
- 5.5%
- Church tax
- 8% / 9%
- Annual saver allowance
- EUR 1,000 / EUR 2,000
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
InvestorsHolding companiesFamily officesHigh earnersCross-border shareholders
Watch out for
- Dividend tax is usually withheld automatically, but that does not mean the final answer is always settled. Foreign portfolios and refund claims can still require documentation.
- A dividend from a German company is separate from the company’s own corporation tax and trade tax.
- If you live outside Germany, your home country may still tax the dividend even after German withholding.
- Treaty relief and beneficial-owner rules matter in cross-border structures.
Frequently asked questions
Does Germany tax dividends?
Yes. Dividends are generally taxed at 25% plus solidarity surcharge, with church tax possibly adding more.
Does Germany have dividend withholding tax?
Yes. German companies usually withhold dividend tax at source.
Are foreign dividends taxed in Germany?
Often yes, if you are resident in Germany. The German rate, foreign withholding tax and treaty relief all need to be checked together.