December 2017 dividend income report

The new year is almost here and I just received my last dividend for 2017.

December 2017 dividend income

  • YUM! Brands: 2.24EUR
  • United Technologies: 3.14EUR
  • Unilever: 18.23EUR
  • Hershey’s: 5.59EUR
  • McDonalds: 5.05EUR
  • Coca Cola: 9.27EUR
  • NVIDIA: 1.40EUR
  • Royal Dutch Shell: 67.92EUR
  • YUM! China: 1.00EUR
  • Gilead: 19.89EUR

In total that’s 133.73EUR from the ten companies that paid me a dividend this month. As usual, the figure I list is after all applicable taxes.

Total dividend in 2017
My total dividend income in 2017 came in at 1,495.34EUR. Just a couple of euros short of 1500EUR!

2018 dividend income to get a boost from tax refunds
Next year my dividend income will get a nice boost from the Belgian government. After several tax increases on investing, there’s now finally a nice treat for dividend investors.

It’s a bit schizophrenic to be honest, but in this case it’s good. Over the last couple of years, the Belgian government significantly increased both the stock transaction tax as well as the dividend tax. They even implemented a speculation tax, which got cancelled after one year because it actually hurt tax revenue.

The silly Belgian tax on portfolios
The budget agreement for 2018 contains two major items that affect stock investors. First up, the government implemented a tax on stock portfolios. Basically, anyone who owns over 500 000EUR (1 million EUR for  a couple) worth of securities will need to pay a tax of 0.15 percent. The goal here is to supposedly tax the rich but I think this will be another failed tax. The truly rich have more than enough methods to circumvent it so the tax base will be really small.

Furthermore, the tax is also very unfair. Someone with 499,999EUR in stocks pays 0EUR, while someone with 500,000EUR in his or her portfolio pays 750EUR. It’s total lunacy.

Tax-free dividends in Belgium!
The funny, and positive thing, is that there are also factions in the government that want to promote investing. They managed to negotiate a nice treat for dividend investors. Belgians are notorious for keeping large cash balances on savings account so some parties are pushing folks to invest more.

To keep it short, Belgian investors will be able to receive 627EUR in dividends tax-free in 2018. The plan is to increase this exemption to 800EUR from 2019. At the current dividend tax rate, this means my 2018 dividend income will increase by 188.1EUR in 2018 and 240EUR in 2019.

Unfortunately, the tax-free dividend income will need to be reclaimed via the tax return. So there will be a significant delay, I will need to pay tax on the first 627EUR in dividends first and I won’t get the money back until late 2019.

Reclaiming dividend tax from the Danish
Speaking about dividend taxes, I’m also planning to reclaim some cash from the Danish government in 2018. As I mentioned earlier on this blog, the dividend income I receive from Novo Nordisk is subject to a 27 percent dividend withholding tax. But there’s a tax treaty between Denmark and Belgium that reduces the rate to 15 percent so I should be able to reclaim the excess 12 percent.

Of course, I live in bureaucratic Europe so these things aren’t processed automatically. Governments want to charge as much tax as possible and make you jump through hoops to get back what is yours. There’s quite a bit of work, and a trip to the tax office, involved with this so I’m waiting until the figure I can reclaim gets a bit bigger. There’s a period of limitation of three years so just to be safe I’ll probably to this before autumn 2018.

Besides Novo Nordisk, I now also have two more Danish dividend-paying companies in my portfolio so it’s starting to become worth the hassle.

New buys

  • I bought some Pandora A/S shares

pandora

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10 thoughts on “December 2017 dividend income report

  1. Nico

    That is almost 11% more dividend income compared to 2016. In a context of higher dividend taxes and weakening USD, that is a nice result!

    Let us hope that we won’t have to jump trough too much hoops to take advantage of the tax free dividend allowance….

    I wish you all the best in 2018!

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    1. Dividends Are Coming Post author

      Thanks man, best wishes for 2018 for you too!

      I hadn’t calculated the year-over-year figure yet, it’s indeed an increase of 11.01%. Most of it is the result of extra capital but yield wasn’t really one of my main criteria this year, I bought a lot of lower-yielding names.

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  2. dividendgeek

    Nice dividend mate. Your dividends are well diversified. Good to know you want be taxed next year. In the US dividends are taxed at 15%. I wish they would get rid of it completely … to encourage investing and provide more disposable income.

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  3. Engineering Dividends

    Hello, DaC. Looks like RDS delivered a hefty sum for you this month, and you’ve got many other nice companies in the group. Certainly seems like you’ve got lots of tax implications to think about, but it sounds like you’ve got a handle on it. It was too bad you just missed the 1500EUR number for annual dividend income. Where are your sites set for 2018? Maybe 2500EUR, or higher? Happy New Year!

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    1. Dividends Are Coming Post author

      RDS is indeed one of my heavy-weights, they account for 18.3 percent of my yearly dividend income. This share is higher than I’d like it to be but I expect this will correct itself over time as my other positions get larger.

      Over 2000EUR would be nice for 2018 but I don’t really set firm goals anymore as that provides a subconscious incentive to “make the numbers” by focusing too much on how much a stock yields.

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  4. Dividend Diplomats

    Very nice month DAC. I am digging the results and MAN you were so close to 1,500 Euros. Those tax laws are ridiculous and I can see how so many people were frustrated by the rules. Luckily, it seems like it has been corrected now and you are going to benefit from the reform. Enjoy a fun and thrilling 2018!

    Bert

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  5. Chris

    I, too, was able to cross $100 in December. This was the first time ever. Your dividends should start a snowball that builds up speed over time. The passive income is truly exciting to witness. Onward and upward!

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