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Dividends: What to Keep in Mind

Dividends: What to Keep in Mind

Dividends can only be distributed from the balance sheet profit or free reserves. The general meeting must approve profit distribution and dividend payments.

For companies requiring an audit, the audit report on the annual financial statements must be available before paying dividends.

The general meeting minutes must specify the date when the dividend becomes due unless it is payable immediately.

Withholding Tax: Within 30 days after the dividend becomes due, Form 103 for public companies and Form 110 for limited liability companies must be submitted to the Federal Tax Administration.

The withholding tax must be paid to the tax office within 30 days of the dividend due date. Since withholding tax is a self-assessment tax, no invoice is issued. In case of late payment, a statutory interest of 5% is charged without a reminder.