Dividends from a listed company
A listed company can also be called a public company. This means that the shares of a listed company are publicly traded on the stock market.
Dividends are partly taxable and partly tax-exempt income
Out of the dividends you receive from a listed company:
- 85% is taxable capital income, i.e. dividend income
- 15% is tax-exempt income.
In practice, the company paying the dividend withholds 25.5% of tax out of the total amount of the dividend before paying the dividend to you. The company also forwards the withholding tax to the Tax Administration.
Owning stocks often results in expenses incurred in making a profit, such as asset management fees. They are deducted from the taxable dividend income, which means that your net taxable capital income is reduced. The expenses are adjusted by a personal liability threshold of EUR 50 first, however.
Example: Aleksi has invested in stocks. In 2019, he received EUR 10,000 as dividends, and he received no other income during the same year. He paid an asset management fee of EUR 110, which was included in the expenses incurred in making a profit.
Aleksi’s amount of net taxable capital income is calculated as follows:
EUR 8,500 (taxable dividend income of EUR 10,000 × 85%)
− EUR 60 (asset management fee of EUR 110 − the personal liability threshold of EUR 50)
= EUR 8,440 (net taxable capital income).
Aleksi pays EUR 8,440 × 30% = EUR 2,532 of tax on his capital income.
The tax withheld by the company that paid the dividend is EUR 10,000 × 25.5% = EUR 2,550.
Therefore, Aleksi receives EUR 18 as a tax refund (EUR 2,550 − EUR 2,532).
Check your pre-completed tax return
Check that your dividend income is shown in the pre-completed tax return you received in the spring and that it is correct. Report missing information and correct wrong information. The party that pays the dividend has withheld the tax and reported the information to the Tax Administration.