Dividends are subject to tax deductions as every other type of income. The dividend withholding tax rate may vary depending on multiple factors such as source of income, company's country of domicile, etc. You should check what taxes or other charges may apply to the company you have invested in. 👀
For example:
You hold 1 share with Allianz (ALV) at the beginning of its ex-dividend date. Allianz announces a gross dividend payment of € 9.60 for its shareholders.
Since Allianz is a German company, the dividend payment is subject to German withholding tax, which is 26.375%. Here is how we can calculate the net amount of the received dividend:
€ 9.60 x 26.375% = € 2.53 total withholding tax
€ 9.60 - € 2.53 = € 7.07 net dividend
To summarise, you will receive a net dividend of € 7.07, while the withholding tax will automatically be deducted.
If you want to learn more about dividends, you can check out our 'Trading 212 Learn' article, 'How dividends work' 👉 here.