A guide to claiming exemption from withholding tax on dividends
October 12, 2022
6 minutes to read
Dividends allow you to generate additional income from your investments. However, you have to share some of these proceeds with the tax authorities. They apply 30% withholding tax across the board to dividend income. Fortunately, you can reclaim a certain amount of this.
1. How much withholding tax can you reclaim?
The gross amount for tax-exempt dividends in both the 2022 and 2023 tax years is EUR 800. This means you can claim back the withholding tax (RV) paid on EUR 800 of dividends.
In most cases, the withholding tax is 30%. Let's assume you received EUR 800 gross or more in dividends: in this case, you can claim back a maximum of EUR 240 net. If, for example, you were paid EUR 200 gross in dividends, you could claim back up to EUR 60.
What if you received more than EUR 800 gross in dividends? And if you also received dividends subject to less than 30% withholding tax? In this case, you should first apply for exemption for the dividends on which you were taxed at 30%. For example, for certain regulated real estate companies investing in healthcare real estate, the withholding tax is 15%. You can claim exemption for these dividends too, but the tax benefit is lower. In that case, opt for the 30% tax rate first.
2. Which dividends are eligible?
You can reclaim the withholding tax on the following dividends:
- All ordinary Belgian and foreign dividends
- Dividends from recognised cooperative companies
- Dividends from companies with social aims
The following dividends are excluded from the exemption:
- dividends from legal structures or received through legal structures, such as foundations and trusts
- dividends from investment funds and trackers (ETFs)
- income from annuities or bond coupons
3. Who can reclaim the withholding tax?
Only natural persons (private individuals) benefit from this exemption. Legal entities such as companies do not receive it.
The exemption applies per taxpayer. If you are married, you can jointly recover up to EUR 480. The following also applies:
- Dividends that relate to the personal wealth of a spouse must be claimed in the name of that spouse.
- Dividends that belong to joint assets (even if held in securities accounts in the name of just one partner), can be claimed fifty-fifty in the name of each spouse.
4. How to apply for the exemption
You do not receive the exemption automatically, and you have to do your own legwork. You can offset the withholding tax deducted from your exempt dividends against your personal income tax. To do this, you must enter the tax that was withheld on those exempt dividends in boxes 1437/2437. As the maximum rate of withholding tax is 30%, you can recover a maximum of EUR 240 withholding tax (EUR 800 x 30%).
The following points are worth bearing in mind:
- You do not need to state the dividend amount you received in the declaration.
- Even if you receive a draft simplified declaration, the exemption will not be filled out in advance for you.
- 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 exemption 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.
5. What if you received dividends on multiple securities accounts?
You can simply add these together as long as you do not exceed the total gross amount of EUR 800 in dividend income.
6. What if you received dividends in kind, not in cash?
Sometimes dividends are not paid out in cash, but in shares. These dividends in kind are also eligible for the exemption. The rules are the same.
7. Where can you find the dividend overview for your investments 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
- Click on search; you can also export your search to a PDF