Germany NRIs · Dividend Tax
Dividend tax on Indian shares for NRIs in Germany
Dividends from Indian companies are withheld at the non-resident rate before they reach you in Germany — here's the treaty position and how to reclaim any excess.
India-Germany key facts: dividend tax
| Default Section 195 rate | 20% |
| India-Germany DTAA treaty rate | 10% |
| Your saving via the treaty | 10% |
| Treaty article / basis | Article 10 — 10% flat rate on Indian-source dividends to resident beneficial owners (no shareholding sub-rate) |
| Your TRC issuing authority | Finanzamt (local tax office, varies by Bundesland) |
Rates reflect India's domestic Section 195 withholding and the India-Germany treaty. Surcharge and cess apply on top where relevant.
How it works on the India side
Since the 2020 shift back to classical dividend taxation, dividends from Indian companies are taxable in the shareholder's hands and the company deducts TDS before paying. For a non-resident the default is Section 195 at 20% (plus surcharge and cess). Whether a treaty rate is available depends on the specific treaty — for many countries the lower dividend rate is written only for companies holding a large stake in the Indian payer, which means individual portfolio investors stay at the domestic rate.
Where a lower individual rate does apply, you claim it with Form 10F and a Tax Residency Certificate lodged with the company or broker, and any quarter withheld at the higher rate before your paperwork was on file is reclaimed through your Indian return. Where no lower rate applies, the dividend still goes on your return, and the real relief sits on your home-country side as a foreign tax credit for the Indian tax already paid.
What changes because you live in Germany
Germany taxes residents on worldwide income (Welteinkommen), so this Indian income is reported alongside the foreign tax paid on Anlage AUS, and the Anrechnung mechanism credits that Indian tax against your German liability. The credit is limited to the German tax attributable to the same income, so a high Indian withholding above your German rate may not be fully recovered. Watch the Progressionsvorbehalt too: even Indian income that a treaty exempts in Germany is still counted when fixing your German tax rate, so it can push the rest of your income into a higher bracket.
Frequently asked questions
Common questions from German NRIs
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Dividend Tax sorted, by an Indian CA who works with German NRIs
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