Mrs. Cristina Enache, in other excellent post published on Tax Foundation, has analyzed the last trends in the tax treatment of dividends in the European Union.
The majority of countries are applying a double taxation, since the company pays Corporate Income Tax plus the Dividend rate for the individual.
As summary, Dividend Tax Rate according to OECD data is like this:
Austria 27.5%
Belgium 30.0%
Czech Republic 23.0%
Denmark 42.0%
Estonia 0.0%
Finland 28.9%
France 34.0%
Germany 26.4%
Greece 5.0%
Hungary 15.0%
Iceland 22.0%
Ireland 51.0%
Italy 26.0%
Latvia 0.0%
Lithuania 15.0%
Luxembourg 21.0%
Netherlands 26.9%
Norway 35.2%
Poland 19.0%
Portugal 28.0%
Slovak Republic 7.0%
Slovenia 27.5%
Spain 26.0%
Sweden 30.0%
Switzerland 22.3%
Turkey 20.0%
United Kingdom 39.4%
As we indicated, the majority of countries subject to tax to the company and to the individual in a clear example of double taxation. An exception to that ruling is the case of Latvia and Estonia. They subject to 20% Corporate Income Tax to the own company when the company pays the dividends to the shareholders.
After this analysis, it is very clear that Andorra is the most attractive system in terms of the treatment of distribution of dividends, since they are fully exempt. Consequently, adding the 10% of Corporate Income Tax and 0% when the dividend is distributed to the shareholder, the total burden is 10% insted of 20% (Estonia and Latvia) or the incredible 51% which Ireland applies.
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