Newbie question on German individual stock dividends, IBKR

I received the first time dividends: it’s from a German stock I own.
Noramlly the amount should be 1764.6 Euros.
Initially I saw this on IBKR Client Portal
image

had no idea where this 1344 number is from. Does anyone know? (this is a side question, doesn’t really matter as this number seems intermediary)

Then finally when I received the cash it was only 1,299.19 Euros. it seems the difference is for withholding tax.

It’s roughly 26.37%

My questions:

  1. how can I verify the accuracy of the tax rate? Is it a Swiss rate or German rate?
  2. Based on my reading on forum posts, I should declare this withholding tax next year in my Swiss income tax declaration and hopefully can get this money back?

Thanks

1 Like

These are your 1299.19 EUR expressed in the base currency of your account, obviously CHF.

From my notes:

German withholding tax on dividend payments from German (!) companies:
25% + 5.5% solidarity surtax thereon = 26.375%

15%.

5 Likes

…in Switzerland, through the Swiss tax declaration.

And, in principle and theory, the remaining 11.375% directly from the German tax authority.

If (s)he started a new thread and then followed through with that, I‘m sure we‘d all be having a blast.

4 Likes

On a side-note: 1764€ is a lot of dividends for one stock. If we look at 4% return, that’s 44k invested. If 5% return, that’s still 35k invested.

I don’t know about your overall portfolio size, but having such large amounts in one stock only can be risky. Just as a word of caution.

1 Like

wow such concise and accurate reply. Thanks a lot Dr PI, please feel free to PM me your city and I am happy to invite you coffee. BTW I can’t open the last link, tried both with my laptop and phone.

you mean start a new thread trying to get the 11.375% from the Germans? sorry for having annoyed you with my previous thread. :sweat_smile: I am happy to invite you coffee too as you replied to my questions recently.

thanks for your kind word, for this one the stock is BASF, I have invested 27k Euros in start of April but it went down now

1 Like

That would actually be cool, I did minor research of that one as well: Here are my fidings:

Es gibt eine Art W-8BEN für DE, das R-D1 und R-D3. Man könnte sich sogar theoretisch freistellen lassen
Aber leider bietet das IB meines Wissens nach nicht an
Dazu muss noch die Anlage: R-D ausgefüllt werden. Sieht aus wie das DA-1
Internationales Steuerrecht – Deutschland | ESTV

No worries. I didn’t mean to go back to that again really - I was rather pre-empting someone, anyone to do it regarding refund of German WHT. :wink:

Regarding the tax refund of WHT, it’s important to distinguish:

  • Swiss DA-1:
    „Hello cantonal tax administration. I promise that I own this stock in my portfolio, for which I received dividends, on which 15% (non-refundable) withholding tax have been with withheld. Will you please give not tax me for them, so I don‘t pay double tax?“
    :point_right:No problem. We‘ll give you the 15%. And definitely charge you personal income tax (>15%) afterwards. We‘ll just set both off against the other, OK?

  • Refund from foreign tax administration:
    „Hello foreign tax administration. I promise that I own this stock in my portfolio, for which I received dividends, on which x% refundable withholding tax have been with withheld. I also promise don’t live in your country, so will you please refund this tax to me? You can just transfer the amount to my bank account, here’s my IBAN and SWIFT code.“
    :point_right: „Sure …but not so fast, my friend. If you don‘t want to pay or leave your taxes with us, we have to make sure that you really do live in Switzerland and pay your taxes there. Also, you better bring convincing evidence that you really did own these stocks, on the dividend date! You see, without good proof, anyone could make a claim, and we‘d pay out and lose good tax money on it…“

And that‘s where the research should start: It’s less about how to fill that application form - but what kind of prerequisites and documentary evidence the foreign tax administration requires (spoiler: from what I‘ve picked up, the Germans require a tax voucher that can be so cumbersome or expensive, even impossible to obtain from to obtain, that it isn’t worth any small personal investor’s while or fees).

1 Like

Funny enough that they let the big fish get away with it for years. Just search for the Cum-Ex and Cum Cum story. But I guess what you write is just another reminder that owning German stocks might not be the best idea when it comes to taxes.

1 Like

I’m in the same position, funnily also BASF stock, just a bit more. :grinning:

From what I understand, for the 11.375% we have to fill the R-D1 document from Internationales Steuerrecht – Deutschland | ESTV

And then send it to the cantonal tax office so that they sign off that we indeed have declared the dividend income, and then send that document to Germany.

Problem seems that on point 5a of R-D1 document, they state that they require proof from a German entity that the tax was paid. Probably German banks or the companies which paid the dividends.That looks difficult for us to obtain through IBKR, that’s a tradeoff from using a cheap online brokers. The big Swiss banks could perhaps have a network with Germany and be more helpful.

In the cash.ch article a guy wrote he got the tax refund from Germany with just a confirmation from the cantonal tax office without any bank proof. So it might be worth a try, at least I will try at some point with the proof from canton and the IBKR statements, we have 3 years. No one would declare income that they never received, so the German offices should accept the cantonal office proof if they are reasonable

1 Like

Pretty sure that an IBKR statement with the deducted tax + a stamp and signature from the cantonal tax office is more than sufficient. The problem is usually the cost (time + money) of the procedure. But as far as I know, It’s possible to claim multiple years worth of dividends. (usually, no clue how that works for german tax specifically)

EDIT: I was wrong, you really need the German stuff, but iirc you can request that from IB.

Für Zuflüsse ab dem 01.01.2012 reichen die Dividendengutschriftanzeigen/Sammelausweise des depotführenden
Kreditinstituts nicht mehr aus. Ab diesem Zeitpunkt ist zwingend die Einreichung von Originalsteuerbescheinigungen
der inländischen (deutschen) Depot-/Zahlstelle gemäss § 50d
Absatz 1 Satz 4 EStG in Verbindung mit § 45a Absatz 2 EStG
erforderlich (vgl. BMF-Schreiben vom 20.12.2012).