Dividend withholding by country in 2025

When we talk about investing in international shares, dividends are a key part of the total return, along with the profits obtained from selling those securities. However, it is not as straightforward as it sounds: taxes can play a significant role in calculating actual profitability. And this is where a factor often overlooked at first comes into play: dividend withholding by countries.

Each country has its own tax regulations and decides what portion of the dividend remains at source before it reaches the investor’s pocket. To this must be added what is payable in Spain, where dividends are taxed as part of the savings base, with rates ranging from 19% to 28% in 2025, depending on the bracket. Although there are international agreements to avoid double taxation, the reality is that this is not always easy to achieve in practice. It requires paperwork, waiting times, and a good knowledge of each country.

What do we mean when we talk about dividend retention by country in 2025?

In short, it is the percentage automatically deducted by the company’s country of origin before the investor sees a single euro of the dividend. In other words, it is a withholding tax, and it is the first tax step that affects that profitability that seemed so clear on paper.

Let’s look at an example to put it into context. If a German company pays a dividend of €100, the German government applies a withholding tax of 26.375% (which includes a solidarity surcharge), so the investor will receive €73.62… and that is before paying taxes in Spain. However, if the dividend comes from a British company, it arrives in full, without withholding tax at source.

The difference is obvious. And in a year, with several dividends in between, this can translate into a handful of percentage points more — or less — in net returns. Hence the importance of having a clear understanding of how dividend withholding works by country in 2025.

And what is happening in Europe?

In Europe, there is enormous fiscal diversity. Even between neighbouring countries there are considerable differences. These are some of the withholdings that will apply at source during 2025:

Spain: 19%.
Germany: 26.375% (includes a 5.5% solidarity surcharge on the prime rate of 25%)
France: 30%.
United Kingdom: 0% (no withholding tax on dividends at source)
Italy: 26%.
Holland (Netherlands): 15%.
Denmark: 27% (can be up to 15% depending on tax treaties)
Norway: 25%.
Belgium: 30%.
Portugal: 28%.
United States: 30% (may be reduced to 15% with the W-8BEN form, depending on the tax treaty)

It is important to emphasize that these rates correspond to withholding taxes, applied by the country where the dividend distributing company is headquartered. For international investors, the correct management of withholding taxes and the application of tax treaties can make a big difference in the final returns.

As you can see, the range is wide: from 0% in the UK to 30% in Belgium and France. This disparity forces investors to look beyond the dividend itself. Dividend withholding by country in 2025 may make one market more attractive than another, depending on the tax impact on the portfolio.

And in America, what is the outlook?

In the United States, the standard is a 30% withholding. However, if the Spanish investor submits form W-8BEN, this can be reduced to 15% thanks to the bilateral tax agreement. A simple procedure, but one that makes a big difference if done correctly.

In Latin America, the situation is also very uneven:

Mexico: applies a 10% withholding tax.
Brazil: currently does not withhold dividends, although its regulations may change.
Chile: withholding tax can be as high as 35%, although there are agreements that allow for adjustments.

Therefore, dividend withholding by country in 2025 in the Americas requires analysing each case separately. There is no one rule that applies to everyone.

Can what has already been withheld be recovered?

This is one of the big questions. Because yes, it is often possible to recover part of that withholding tax, but it is not always automatic or straightforward.

In Spain, the law allows you to deduct taxes paid abroad, but only up to the limit set by international agreements. If the withholding in the country of origin exceeds that limit, you must file a claim directly with the foreign administration. And that involves forms, tax residence certificates and, in some cases, a great deal of patience.

Some useful strategies for managing this in 2025:

Submit the W-8BEN in the US. . so that the 30% does not apply to you.
Request partial refunds in countries such as Germany or France.
Invest through funds or ETFs that already manage these returns internally.
Spending time on effectively managing dividend withholding by country can improve your portfolio’s return by several percentage points per year. This is not a minor detail.

And what about the tax authorities here?

Regardless of what is retained abroad, dividends are taxed in Spain as part of the savings base. The stages for 2025 are as follows:

19% up to €6,000.
21% between €6,001 and €50,000.
23% from €50,001 to €200,000.
27% from €200,001 to €300,000.
28% from €300,001 onwards.

As we said, you can deduct part of the tax paid abroad, but without exceeding the limit set by the agreement. If you don’t do it right, it’s easy to end up paying more than you should. That is why it is so important to understand how dividend withholding works in different countries and how it is declared in Spain.

Strategies for reducing the fiscal impact

It’s not just about choosing good causes, but also about investing wisely. Here are some ideas for getting more out of taxation in 2025:

Consult double taxation agreements before investing in another country.
Focus on markets with low retention at source, such as the United Kingdom or Hong Kong.
Ensure that you submit the necessary forms (such as the W-8BEN in the US).
Diversify geographically to soften the impact of countries with high withholding taxes.
Have a specialist advisor who can help you tailor your tax strategy to your profile.

A well-informed investor does not just look at the raw figures. Look at the net amount, what actually ends up in your account. And there, dividend withholding by country in 2025 could make a significant difference.

José Sellés, your financial advisor in Mallorca

Investing outside Spain opens up a world of possibilities. But it also requires being aware of each country’s regulations, especially when it comes to taxes. Dividend withholding by countries is one of those details that, if overlooked, can significantly reduce the overall return on investment.

At José Sellés, financial advisors in Mallorca, we work with you to ensure that your international portfolio performs as it should, without any tax surprises. If you are interested in optimising the taxation of your investments and making the most of existing agreements, we will be delighted to help you.

Let’s talk. Because investing with clarity also means investing with confidence.