The tax-free distribution of dividends from capital reserves offers significant advantages for private investors, as they are tax-favored in certain cases. According to current reports, more than 20 publicly traded companies, including a pharmaceutical company, plan to pay their dividends directly to shareholders in 2025 without tax deductions.
Background: Tax-Free Dividends from Capital Reserves
What does “tax-free dividend” mean?
A tax-free distribution typically occurs when companies distribute profits not from current business results (annual surplus), but from so-called capital reserves or other statutory reserves. In Germany, such distributions are typically subject to withholding tax. However, there are exceptions: if the reserves were created before the introduction of corporate tax in 1977 (“old holdings”), they can be paid out tax-free to shareholders under certain conditions.
Relevance for Private Investors
For private investors, this means they do not have to pay withholding tax on these dividend payments. This makes such distributions particularly attractive and can lead to a higher net return.
Current Development: Pharmaceutical Companies and Other Companies
According to media reports, a pharmaceutical company, along with over 20 other publicly traded companies, is planning such a tax-free dividend payment for the year 2025. The exact list of affected companies has not yet been published, but particularly older traditional companies often have corresponding old holdings in capital reserves.
Example Industries
In addition to the mentioned pharmaceutical company, other industries are affected, especially industrial and chemical companies with a long corporate history. Historically, successor companies of the former I.G. Farben group (such as Bayer or BASF) have repeatedly been at the center of such special distributions. However, there is currently no indication that these corporations are explicitly mentioned.
Legal and Practical Aspects
- Tax Legislation: The possibility of tax-free distribution is closely linked to the regulations concerning the taxation of wage and dividend income.
- Transparency: The respective companies must disclose whether a distribution is actually considered “tax-reducing.”
- Investor Benefits: For investors, these payments eliminate the usual withholding tax on capital income.
Summary
More than 20 publicly traded companies – including at least one pharmaceutical company – are planning a tax-free dividend payment from their capital reserves for the year 2025. This practice is particularly interesting for private investors as it allows them to increase their net returns. The legal requirements are complex and depend on when the reserves were created; especially old holdings before 1977 offer advantages here.