Taxation foreign stocks and dividends

[SCiruelos]

I have a question to foreign stocks. I bought Amadeus and when I got paid dividend, there were taxes taken from the dividend, I believe according to Spanish law. What I am surprised as well is that this amount has been deducted as well from my Freistellungbetrag. So to me, it looks as if this has been paid taxes twice. Am I doing something wrong?

Thanks

[ehemaliger Nutzer]

Spanien erhebt auf Dividenden eine Quellensteuer von 19%, die mit 15% angerechnet wird. Darüber hinaus wird zusätzlich deutsche Abgeltungssteuer erhoben. Also ist alles korrekt.

https://www.bzst.de/DE/Privatpersonen/Kapitalertraege/AuslaendischeQuellensteuer/auslaendischequelle...

[GetBetter]

@SCiruelos 

I am not sure I fully understand your point but if I am not mistaken you complain that your Freistellungbetrag has been reduced by the full dividend while you expected it to be reduced by the net amount only. Is this correct?

This is the correct procedure. Spain withholds 19% income tax whereof 15% is recognized in Germany. These 15% are documented in the pot "anrechenbare ausländische Quellensteuer" which you can find at the very end of the tax information that you got from comdirect.

For the remaining 4% you can apply for relief directly in Spain (which is probably not worth the effort).

What's the benefit of the pot "anrechenbare ausländische Quellensteuer"?

Even in German that's not easy to describe

Short version: It becomes relevant if your Freistellungbetrag reaches zero during this calender year.

[SCiruelos]

Thanks for the explanation, it was useful.

However my complain is that in this way I am paying taxes in both countries. To me this is double taxation. I am paying taxes in Germany because my Freibetrag will be reduced (full amount) and in addition to this I am paying taxes in Spain (19%). So I am payng the reduction of my Freibetrag (this is like paying taxes!) and then I am paying the 15% recognized in Germany. The only part I can recover is the 4%, which as you said, it is not worth the effort.

I am not sure if I am making a thinking mistake, I do not think so. 

[GetBetter]

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@SCiruelos  schrieb:

So I am payng the reduction of my Freibetrag (this is like paying taxes!)

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Here's the misconception.

In fact you do not pay a single cent in Germany as long as the amount is covered by the Freibetrag. It would be a problem only if this repeated deductions would result in real tax payments but before this happens the already mentioned pot "anrechenbare ausländische Quellensteuer" is taken into account.

Assuming your Freibetrag is fully utilized, the pot stands at 50 € and you receive your next dividend. Then this pot functions like another Freibetrag so you are allowed to cash approx. 200 € free of tax (the multiplier 4 results from the tax rate of 25%).

* Possibly this is a bit simplified as I am not in all the details.

All this might sound confusing and unnecessary and actually I am not 100% sure why it is done this way but you are definitely not paying the same tax twice.

[SCiruelos]

Thanks GettBetter for the comprehensive explanation.

However, I am a different opinion than you. For me this is clearly paying taxes twice. The fact that my Freibetrag is reduced is absolutely the equivalent to paying Engeltungsteuer (I do exhaust my Freibetrag every year !!!). The pot you mentioned reduces the effect, but only partially, not fully.

So clearly, if one day you doubt to buy Deutsche Telekom or Orange or SAP and Atos (the examples are freely invented by me), you should defintely go for the German peers !!