Dividend Tax Rates EU vs Andorra

Jose Maria Alfin
October 6, 2023

Summary on dividends tax rate in Europe vs Andorra

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.

Please, do not hesitate to contact us or book a virtual consultation to discuss further details.

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