An amount of 72 billion euros. This is the cumulative sum of dividends paid to shareholders by CAC 40 companies for the year 2024. This beautiful “prize” is linked to the financial results posted by these groups in 2023. A company which records profits has several options to mobilize them. It can invest in equipment, reduce debt, grant salary increases or reward the loyalty of its shareholders through the distribution of a dividend. Most of the time, it creates a combination of these different solutions.
With the appreciation of the stock price, the payment of the dividend contributes to the annual performance perceived by the holder of a share. It materializes in the form of cash paid into your securities account or your stock savings plan (PEA). In the same way as capital gains, the dividend received is taxed. This taxation will differ depending on the nationality of the company which distributed it and depending on the envelope in which your shares are housed.
If the firm is French, you initially receive the entire dividend. If the company is foreign, however, you are subject to withholding tax, an amount that varies from one country to another. For example, if you hold Pirelli shares, the Italian tire manufacturer, you will only receive 75% of the dividend paid by it, because Italy will withhold a tax of 25% at source. This amounts to 15% in the United States and the Netherlands, and 26.375% in Germany.
Choose French companies!
If you “take out” this dividend from the PEA, you will only have to pay French social security contributions of 17.2%. If you keep it to reinvest it in stocks, you won’t be taxed. On the securities account, taxation is automatic in France, with the application of the flat tax of 30% (12.8% income tax and 17.2% social security contributions). To compensate for possible double taxation, the French State grants you a tax credit corresponding to 15% of the dividend paid, recoverable the following year.
Clearly, when you receive a dividend from Deutsche Bank on your securities account because you hold securities from the German bank, you are subject to a tax of 26.375% at source, then a tax of 30% in France, before receiving a 15% discount in the form of a tax credit, or a final tax of 41.375%! If it makes sense to own companies that are generous with dividends, favor French companies or groups established in countries where the withholding tax will not exceed 15%.