Distribution without tax deduction

NichtRelevant · 2025-04-14T16:32:13.221367Z

I always like the fact that Deutsche Telekom's dividend payments are booked without tax deduction.

1Wk

As far as I know, however, the broker reduces the purchase price for this. This means that downstream taxes would be due on the sale. Have you observed this?

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Enrique@Dividenden_Monteur

1Wk

@theGREENgeck0 Correct.
This is called tax deferral.

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NichtRelevant@NichtRelevant

1Wk

@theGREENgeck0 You are right. Technically speaking, this is a tax deferral until the position is sold. But since I have the 'T-Share' as a perpetual position in my portfolio anyway, I'll just ignore it. 😅

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Solitair@Solitair

1Wk

@NichtRelevant No, technically speaking, this is tax deferral and has nothing to do with the broker. The reason for this is that Telekom does not distribute profits but repays equity. This reduces the acquisition costs.

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Martin@Marsellus

6D

In addition, compound interest is significantly increased. Without having looked into it in detail, I wonder why more companies don't do this.

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1

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Leo@DasistderWeg

5D

@Dividenden_Monteur I've been wondering for some time what happens when you reach an equity of €0. After that, you have to pay taxes as normal, right?

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SemiGrowth@SemiGrowth

1Wk

Can the cost price become negative as a result?

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Mojito@Mojito

1Wk

@SemiGrowth I would also be interested in that. I would say yes (dangerous quarter knowledge)

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Patte1081@Patte1081

6D

@SemiGrowth No, he can't. This is excluded by law. As soon as the cost value reaches €0, all further repayments are no longer tax-free, but taxed as normal dividends.

Thinking further. If you later sell the shares, the entire proceeds from the sale would be your capital gain and, depending on the exemption order, taxable This means that you pay significantly more tax on the sale because you can no longer offset any acquisition costs (cost value).

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Mojito@Mojito

6D

@Patte1081 Top. Thanks for the clarification!

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Royal_TS@Royal_TS

1Wk

Nice sum 👏

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NichtRelevant@NichtRelevant

1Wk

@Royal_TS Danke.🤗

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Bubu@Bubu_98

1Wk

Why without tax? 🤔

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NichtRelevant@NichtRelevant

1Wk

@Bubu_98 No taxes are deducted from the 90 cent dividend. This has always been the case in previous years. Telekom writes about this:

'Since Deutsche Telekom's dividend is paid in full from the tax contribution account within the meaning of § 27 of the German Corporation Tax Act, the payment is made without deduction of capital gains tax and solidarity surcharge. For domestic shareholders, the dividend is not subject to taxation.

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Bubu@Bubu_98

1Wk

@NichtRelevant cool something learned again thanks 👍

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Uwe@SchlaubiSchlumpf

6D

@Bubu_98 If I'm not mistaken, you pay tax as soon as the total dividends paid out exceed your cost price. And the tax-free dividends paid out reduce the cost price, which serves as the basis for calculating your profits when you sell. This means you pay the tax later, which is of course good for compound interest.

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Floriano@FlorianoPerlini

5D

How cool is that and why is that? Then I would have bought a few T Akien if I had known the info

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