Tax & Legal

Shareholders of a U.S.-based S corporation are eligible for a full refund of the withholding tax on dividends paid by a German-based subsidiary. This was decided by the Supreme Tax Court in a recently published judgment.

The Supreme Tax Court has held that a dividend paid to a US S corporation on a holding of at least 10% is subject to a 5% withholding tax insofar as its shareholders are tax-resident in the USA.