Dividends before and after tax: gross, net and withholding explained
A gross dividend is the declared amount per share times the shares; the net dividend is what reaches the account after tax withheld at source. That tax is usually kept back by the country where the paying company is based, and the investor's own country may tax the dividend again, often with a credit for the foreign tax. This guide explains the steps without rates, which depend on the countries involved and change. It is general information, not tax advice.
Updated 20.10.2026
Gross and net
A company declares a dividend per share; times the shares that carry the right to it, that is the gross dividend. The net dividend is what arrives: the gross amount minus tax withheld at source and, sometimes, fees along the way. A broker statement usually shows a dividend line with the gross amount and a withholding line with the tax kept back.
The dates of a dividend
Ex-dividend date: shares acquired on or after this day do not carry the next dividend.
Record date: the company's register is read to see who is entitled.
Payment date: the money is paid, often weeks later, and the tax at source is withheld.
Tax withheld at source
Many countries keep back part of each dividend their companies pay to investors abroad. The level is set by the country where the paying company is based, not by the investor's or the broker's country, and some countries withhold nothing. It happens automatically, before the money leaves. Dividends from companies at home can have tax withheld too, under domestic rules.
Treaties, relief at source and reclaims
Double-tax treaties often set a lower withholding for residents of the partner country. Whether that level is reached depends on the route.
Relief at source: the treaty level is applied at payment, typically when the broker has a declaration of the investor's residence on file.
Reclaim: the full withholding is taken and the difference is claimed back from the tax authority of the company's country, with forms and deadlines that differ by country. It can take months and carry fees.
No relief: without a treaty or a timely claim, the full withholding stays with the country that took it.
Tax in the country of residence
The country of residence may tax the same dividend again. Many countries give a credit for the foreign tax, often limited to the level the treaty allows; tax withheld above that level is usually not credited, which is what a reclaim is for. Some countries apply a flat rate, some add dividends to other income, some exempt part of them. A foreign broker usually files nothing in the investor's country, so declaring the income where it is required stays with the investor.
Distributing and accumulating funds
A distributing fund passes dividends on to its investors; an accumulating fund reinvests them inside the fund, so nothing is paid out. Not paying out does not always mean no tax: some countries tax an accumulating fund's income, or a notional amount, every year.
A fund that owns foreign shares has tax withheld on their dividends before the money reaches it, at a level that depends on the treaties of the fund's own country, its domicile.
Investors in the fund usually cannot reclaim it, and often it appears on none of their statements; some funds report it so that it can be credited, depending on the countries involved. This is one reason two funds that follow the same index can keep a different share of the dividends.
How Allocaria shows dividends
The Dividends page of the account estimates the next twelve months of dividends from each holding's per-share payments times the shares held now: the sum of the last twelve months where a year of history exists, otherwise the latest declared payment times the usual number of payments a year (four when the data does not say), with no invented growth rate.
It also shows the yield on value and on cost, and the next payments already declared but not yet paid, charted by month, each currency on its own, never converted or added together.
All amounts on that page are gross, before any withholding. A holding without dividend data says No data, never zero. No tax amounts are calculated: Allocaria works out no withholding and no tax due.
An Interactive Brokers statement is read with its dividend and withholding-tax rows, and the comparison of the portfolio with an index fund shows those dividends after the withholding the statement lists, in euros.
Most other broker files are read for purchases and sales only, so their dividend rows are counted and left out. The broker's statement remains the record of what was paid and withheld. This is general information, not tax advice.
Common questions
The gross dividend is the declared amount per share times the shares. The net dividend is what arrives after tax withheld at source and any fees along the way.
Sometimes. A treaty can lower the withholding, at payment through the broker or later through a reclaim to the tax authority of the company's country. Forms and deadlines differ by country.
Not necessarily. Tax can be withheld inside the fund on the dividends it receives, and some countries tax an accumulating fund's income each year although nothing is paid out.
Partly. With an Interactive Brokers statement, the comparison with an index fund shows dividends after the tax withheld at source, as the statement lists it; tax due in the country of residence is not taken off. The estimates on the Dividends page are gross, before any withholding. Allocaria works out no withholding and no tax due, because they depend on the countries involved and on each person's situation.
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General information, not investment, tax or legal advice, and not a recommendation about any security. Allocaria is a decision-support tool; it places no orders and holds no money.