5Mon·

Today I would like to shed some light on the special tax situation of the $TDIV (+0.5%) which result from the fact that it is a Dutch ETF.

One particularly interesting aspect becomes apparent if you have already exhausted your tax-free allowance, as the tax burden is reduced in this case due to the special structure of the ETF.

The ETF deducts a (Dutch) withholding tax of 15% on dividend payments, which may seem disadvantageous at first glance. However, this is precisely where it has a tax advantage: by offsetting this withholding tax against the domestic tax burden and the partial exemption, the effective tax burden is significantly reduced. As a result, investors have to pay less of their distributions than would be the case with comparable ETFs without withholding tax.

Helmut Jonen once wrote more specific figures on this in his story:

"As a result, the tax burden on dividend distributions is not only reduced to 18.46% due to the 30% partial exemption, but even to just 17.63%. This would bring the partial exemption down to 33.15%."

14 Comments

TOM@Dagobert10

5Mon

However, the dividends paid must also be taken into account when considering the overall performance!

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Thomas@Thomas_1963

5Mon

It's a good thing that my tax-free allowance has already been used up by the first dividend payment in March.

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Banana M.@Banana_Millionaire

5Mon

Thank you for that. Unfortunately, it is still often claimed that ETFs are at a tax disadvantage. Many people simply don't understand this and you have explained it relatively simply.

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six@six

5Mon

@Portfoliopferd you might be interested (we recently had this topic somewhere in the comments)

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Stefan@Slucks87

5Mon

A performance of 57% in 8 years is not exactly good, so I'm willing to accept higher taxes for a better performance

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Steffen@Maveric2005

5Mon

@Slucks87 Of course, you must not forget the approx. 4% payouts and approx. 7% dividend increase. On the other hand, it is a good addition to an e.g. $FGEQ

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plaul@plaul

5Mon

I have a similar view.
I personally find the performance/dividend ratio appropriate.
Without reigniting the old discussion between value / growth strategies, I think the $TDIV is great, especially in combination with $VHYL.
I think if you combine them in 1/3 to 2/3 (with 2/3 the $VHYL), you get a solid combination of performance and dividend as a value investor.

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Dividendenoldie@Dividendenoldie

5Mon

I have just checked this issue with this ETF or with Flatex again, as I read the statement, the partial exemption was listed but not taken into account.
I'm curious to see what they write, I'm not a tax expert either and may have misinterpreted it... 🤔😀

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Golden Boy@randomdude

5Mon

@Dividendenbezieher Let us know how it turns out!

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Dividendenoldie@Dividendenoldie

5Mon

@randomdude I have received an answer from Flatex. The partial exemption is fully credited, it was a mistake in my thinking... :)

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Christian@christian

5Mon

Thanks!

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Golden Boy@randomdude

5Mon

Is it possible to reclaim withholding tax from the Netherlands?

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plaul@plaul

5Mon

@randomdude Instead of paying tax in Germany, you have paid tax in the Netherlands and de facto you save the solidarity surcharge on it.
So you don't have to fill out any Dutch forms and you don't have to get anything back from the Netherlands, because there is nothing to get back, as it is treated as if you had paid the taxes in Germany, except that you just had to pay less.

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Golden Boy@randomdude

5Mon

@plaul All right, now I've understood it too 🙃

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