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.
When a listed company pays out dividends, the income is taxed during the year when the dividends are paid to the recipient.
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.
Tax rate on capital income
| Up to €30,000 | 30 % |
|---|---|
| Over €30,000 | 34 % |
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 against the taxable dividend income and also against any other capital income you might have, which means that your net taxable capital income is reduced. The asset management fees are adjusted by a personal liability threshold of €50 first, however.
Example: Aleksi has invested in corporate stocks through stock-exchange trading. In 2023, he received €10,000 as dividends, and he received no other income during the entire year. He paid an asset management fee of €110, which is regarded as being part of Aleksi's deductible expenses for the production of income.
Aleksi’s net taxable capital income for 2023 is as follows:
€8,500 ( €10,000 in received dividends subject to tax × 85% )
− €60 (asset management fee of €110 − the personal liability €50) = €8,440 (net taxable capital income).
Aleksi pays €8,440 × 30% = €2,532 of tax on his capital income.
The tax withheld by the payor company is €10,000 × 25.5% = €2,550.
After Aleksi’s dividends have been assessed in taxation, he gets €18 as a refund (€2,550 − €2,532).
Check your pre-completed tax return
In general, the Tax Administration receives information on dividends directly from asset-management companies and banks, both in Finland and other countries. 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.
How to report your dividend income to the Tax Administration