Dividends: taxes

How will I be taxed when receiving a foreign dividend?

When you receive a dividend from a non-Belgian company, as a Belgian resident, you will have to pay the foreign withholding tax as well as the Belgian withholding tax. The foreign withholding tax is a tax that is charged in the company's country of origin. On what remains of the gross dividend after deduction of the foreign withholding tax, the Belgian withholding tax (30% since 1-1-2017) will be applied. This leads to a net dividend (after deduction of the foreign withholding tax and Belgian withholding tax) which is booked automatically on your trading account. The Belgian Government has a tax treaty (the so-called 'double tax treaties') with a number of countries, which allows you to have a reduction on the foreign withholding tax. Here's an example: Let's assume that a foreign company pays out a gross dividend of 100^EUR . The foreign withholding tax (in the company's country of origin) is e.g. 25%. Consequently the balance will be 75^EUR (100^EUR - 25^EUR ). On this remaining amount of 75^EUR , as a Belgian resident, you will be charged 30% Belgian withholding tax (30% of 75^EUR = 22,50^EUR ). At the end of the line, a net dividend of 52,50^EUR will be booked on your trading account.

How to recover a part of the withholding tax of a foreign dividend?

Belgium has a double tax treaty with a number of countries. These double tax treaties imply that a Belgian resident won't be subjected to the entire foreign withholding tax. In some cases, the double tax treaty is applied automatically. At Keytrade Bank, this is the case for dividends of most US stocks (which are traded on the US exchange). The withholding tax in the United States is 30%. Thanks to the double tax treaty between the United Stated and Belgium, the US withholding tax is reduced automatically to 15% for Belgian residents (individuals). On the remainder of the gross dividend after deduction of the US withholding tax, the Belgian withholding tax of 30% will be applied. In other cases, the double tax treaty is not applied automatically. In a number of those cases, the shareholder will have the possibility to recover a part of the foreign withholding tax when the dividend has been paid out. Please be advised that this is not possible for all countries. We can provide you with the forms to initiate the process of recuperation of a part of the (foreign) withholding tax. You need to complete these forms and send them back to Keytrade Bank, signed by the local fiscal authorities (the place where you live in Belgium). Please keep in mind that such a procedure of recuperation can take several months or even years. Please keep in mind as well that such a recuperation process is not free of charge. Our tariffs are available on our public website.