Exemption from withholding tax on dividends
October 31, 2023
3 minutes to read
A dividend is the profit a company pays out to its shareholders. This payment can consist of either cash or shares. Dividends are additional income and therefore movable assets on which you have to pay tax. The withholding tax rate is 30% (after withholding foreign retention tax in case dividends are paid by a foreign company). The good news? You can reclaim part of it. This article tells you how much of which dividends you can reclaim, who is eligible to do so, and how to apply for tax relief.
How much withholding tax can you reclaim?
You can reclaim a maximum of EUR 800 gross in the 2023 tax year (income from 2022) and the 2024 tax year (income from 2023), respectively. The maximum withholding tax rate is 30%. This means you can recover a total of EUR 240 net.
What if you received more than EUR 800 gross in dividends? The maximum remains EUR 240 net. This amount will be lower for anyone who received less than EUR 800 in dividends. If, for example, you were paid EUR 200 gross in dividends, you could claim back up to EUR 60.
If you also received dividends for which you were charged less than 30% withholding tax, do the following: first apply for tax relief on those dividends where you were taxed at 30%. For example, the withholding tax rate is 15% for certain regulated real estate companies that invest in healthcare real estate. Tax relief applies to these dividends, too, but the tax benefit is lower.
Which dividends qualify for tax relief?
The dividend tax relief applies to:
- All ordinary Belgian and foreign dividends
- Dividends from recognised cooperative companies
- Dividends from companies with social purposes
Those where you cannot claim relief:
- Dividends paid by or received through legal structures such as foundations and trusts
- Dividends from investment funds and trackers (ETFs)
- Income from annuities or bond coupons
Sometimes dividends are not paid out in cash, but in shares. These dividends in kind are also eligible for this tax relief. The rules are the same.
Who can claim this withholding tax relief?
Only natural persons (private individuals) benefit from this tax relief. This is done via a declaration on your personal income tax return. Please note that legal entities such as companies cannot do this.
The tax relief is available per taxpayer. In other words, both partners in a couple are entitled to tax relief. Are you married? If so, it is possible to reclaim a maximum of EUR 480 (twice the 30% withholding tax mentioned above) jointly. Please note the following points:
- If you are married with separation of goods or if you legally cohabit, each partner must apply separately for tax relief on the dividends they have received.
- Don't have a marriage contract? In this case, you fall under the default legal system. This means the dividends are shared, regardless of whose name appears on the share custody account. The dividends will be assigned equally, with half given to each of the spouses.
If you received dividends on several investment accounts, you can simply add them toegether. The total gross amount of dividend income remains at EUR 800 and you cannot exceed this.
Withholding tax declaration on dividends
You do not receive tax relief on dividends automatically. You need to recover the withholding tax withheld on your qualifying dividends through your personal income tax declaration. You can do so under code 1437/2437. Please note: when you receive your simplified draft declaration, the box for tax relief on withholding tax on dividends is not filled in by default. This means you have to do it yourself. Otherwise, you will miss out on this tax benefit.
The following points are worth bearing in mind:
- You do not need to list in the declaration the amount of dividends you received.
- If you do not have any tax to pay (for example, because you already paid too much tax during the tax year), the refunded amount will be paid into your account. If you have tax to pay, the relief is simply deducted from the amount you owe the tax authorities.
- If you do not live in Belgium, you can recover the deducted withholding tax via the tax return for non-residents.
Where can I find the dividend statement for my investments at Keytrade Bank?
Follow these steps to read your dividend statement at Keytrade Bank:
- Log in to your account
- Select Investing in the left-hand column
- Click Portfolio in the left-hand column
- Click on your stock exchange account
- Under Portfolio details, click on Transactions
- Click on Dividends / Interest in the Transaction type drop-down menu
- Enter the start and end date
- Press search. You can also export the search as a PDF.