Introduction to Tax-Free Dividends
More than 20 publicly traded companies in Germany are planning to pay their dividends wholly or partially tax-free from capital reserves in 2025. This strategy may be particularly attractive for investors who focus on a tax-optimized return strategy. Here are some key aspects and examples:
Why are tax-free dividends interesting?
- Tax Optimization: Tax-free dividends can increase the net return for investors since there are no deductions for taxes.
- Capital Reserves: The distributions come from capital reserves, which are not derived from current profits. This means that companies do not use their profits directly for the dividends.
Examples of companies with tax-free dividends
- MPC Capital: This company plans to pay a dividend of 0.27 euros per share for the fiscal year 2024. The distribution is made tax-free from the tax contribution account according to § 27 of the Corporate Tax Act.
- Other companies: There are several other German companies pursuing similar plans, including a financial service provider from Hamburg.
Legal Foundations
- Corporate Tax Act: The tax-free distribution is based on the tax contribution account according to § 27 of the Corporate Tax Act. This allows companies to pay dividends from capital reserves without a tax deduction.
Benefits for investors
- Increased Yield: Tax-free dividends can enhance the yield for investors since no taxes are deducted.
- Flexibility: Companies can use their capital reserves to pay dividends without affecting current profits.
Property Dividends in Comparison
Property dividends: Unlike cash dividends, property dividends are generally taxable. Exceptions exist for stock property dividends, which can be tax-deferred until the stocks are sold.
Overall, tax-free dividends offer an attractive opportunity for investors to optimize their yields. However, it is important to understand the legal framework and the specific conditions of each company.