Dividend Tax Rates EU vs Andorra
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:
Czech Republic 23.0%
Slovak Republic 7.0%
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.