Luxembourg NRIs · Dividend Tax
Dividend tax on Indian shares for NRIs in Luxembourg
Dividends from Indian companies are withheld at the non-resident rate before they reach you in Luxembourg — here's the treaty position and how to reclaim any excess.
India-Luxembourg key facts: dividend tax
| Default Section 195 rate | 20% |
| India-Luxembourg DTAA treaty rate | 10% |
| Your saving via the treaty | 10% |
| Treaty article / basis | Article 10: flat 10% treaty cap, irrespective of shareholding size |
| Your TRC issuing authority | Administration des contributions directes (ACD) |
Rates reflect India's domestic Section 195 withholding and the India-Luxembourg 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 Luxembourg
Luxembourg residents are taxed on worldwide income, sorted into tax classes by family status, with a foreign tax credit for the Indian tax paid. The treaty's flat 10% cap on Indian interest and dividends applies to everyone, with no shareholding sub-rate, so even a large holder gets the lower rate once a TRC and Form 10F are on file. That makes claiming the treaty rate up front worthwhile rather than suffering the 20% dividend default and reclaiming later.
Frequently asked questions
Common questions from Luxembourg NRIs
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Dividend Tax sorted, by an Indian CA who works with Luxembourg NRIs
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