The question of tax-free dividends with a yield of 5% at a German financial service provider is currently relevant, as more than 20 publicly traded companies in Germany are planning to pay their dividends fully or partially tax-free from capital reserves in 2025. This practice has direct implications for the net yield on investments, as no capital gains tax and no solidarity surcharge will be deducted.
Tax-Free Dividends in Germany
Tax-free dividends are often paid in Germany from the tax deposit account in accordance with Section 27 of the Corporation Tax Act. This means that the distributions do not stem from the company’s current profits but from reserves or deposits that the shareholders contributed earlier. Companies that pay tax-free dividends include, among others:
- Jenoptik: This TecDax company plans to pay a dividend of 0.38 euros per share for the fiscal year 2024, which corresponds to a yield of about 1.7%.
- Vonovia: The DAX company plans to pay a dividend of 1.22 euros per share, corresponding to a yield of about 4%.
- Freenet: The MDAX company plans to pay a dividend of 1.97 euros per share, which is mostly tax-free.
Financial Service Providers with High Yields
However, there is no specific information that a German financial services provider is planning a tax-free dividend with a yield of exactly 5% in 2025. Most of the mentioned companies offer yields that are either below or above this value. Investors should focus on the specific distributions and yields of individual companies in order to find the best investment opportunity.
Outlook
The tax-free distribution of dividends can be attractive for investors as it increases the net yield on investments. It is important to examine the specific conditions and yields of individual companies to choose the best investment opportunity.