Dividend payment to director-cum-controlling shareholder

The dividend tax rate for dividend payments made to directors-cum-controlling shareholders amounts to 26.25 percent for 2020. This has been increased to 26.9 percent for 2021 because of the reduction in corporation tax rates for which the company’s profits are liable. The increase in the dividend tax rate may render it appropriate for directors-cum-controlling shareholders to make a dividend payment to themselves before the current year is out, for example in repayment of a debt they may have with their company. It should be pointed out, however, that such a dividend payment may bring with it an increase in the director-cum-shareholder’s “Box 3” tax charge for the year.

Please bear in mind that dividend payments are not permissible for businesses that have made use of the NOW (Employment Bridging Emergency Fund) scheme.

Dutch version: Dividend voor de dga