Date: 15th May 2023

Many investors commonly use the strategy of investing in dividend stocks. Yet, investors holding foreign shares often have to pay additional withholding tax on dividends in the respective country. A recent survey conducted by BETTER FINANCE and DSW[1] among 3,000 investors across the EU found that withholding tax (WHT) refund procedures are cumbersome and costly, making it difficult or financially unreasonable for non-professional investors to reclaim excess withholding tax on cross-border dividend income. More than 90% of European investors find the WHT reclaim procedure overall difficult, while in close to 70% of cases the investors incurred costs. Moreover, substantial knowledge and compliance with refund procedures are required, and delays are also detrimental, thus undermining investors' confidence in cross-border investment within the EU.


The survey results also show that, due to the complexity of the procedure, over 83% of investors do not manage to reclaim tax withheld in another EU Member State and were effectively double-taxed. As a result, 31% of investors intend to stop buying foreign EU shares due to cross-border WHT issues. Besides, WHT procedures across EU countries are viewed as far more complicated and less efficient than those from Switzerland or the US as the source country of investment income.


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[1] Research Report: Withholding taxes on dividends in the European Union | An uphill battle for individual shareholders