MiKaDiv

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MiKaDiv

(German: Mitteilungsverfahren Kapitalertragsteuer auf Dividenden aus Aktien und Hinterlegungsscheinen)

Notification procedure regarding capital income taxes on dividends from shares and depositary receipts

MiKaDiv is the new reporting framework to prevent abuse in the taxation of dividends and the refund of withholding tax (WHT) on capital gains from German shares, profit participation certificates, convertible bonds. In addition, German puplicly traded companies are required to report the owners of their shares (Aktionärsregister) to the Federal Central Tax Office (BZSt).

It is one of the most drastic, process-driven overhauls to WHT compliance Germany has seen in years, affecting all the participants in the custody chain. The legal basis are the sections 45b and 45c of the German Income Tax Act (EStG).

How MiKaDiv Will Reshape German WHT Reclaim Processes

MiKaDiv takes effect on January 1, 2027 and will ultimately have an impact on the reclaim of WHT in Germany. The reporting is necessary for all the participants (domestic and foreign) of the custody chain in case of a German dividend payment.

The German paying agent (the institute deducting the WHT) has to be provide the data via the electronic interface DIP to the BZSt. Therefore, all the participants in the custody chain need to provide the relevant data along the custody chain, the paying agent will send all the data to the BZSt.

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MiKaDiv Industry Whitepaper

Balancing technical expertise with practical insights, this paper is a go-to resource for navigating your MiKaDiv compliance journey—no matter where your organization currently stands.

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Main data points

Beneficial Ownership

Beneficial owner of the recipient of the dividend (address data etc.)

Share Holdings

Holding amount on the ex-date (FiFo method)

Trading History

Trading of any stocks which are less than a year before the ex-date

Financial Arrangements

Financial Arrangements which are still open around the ex-date

Main challenges

Data Exchange

Financial market participants have to align on the data exchange

Data Quality

Get correct and complete data in time

Owner Transparency

The data must be on the level of a beneficial owner

Reporting Processes

Set up the new reporting workflows (to the BZSt, between the different market participants, to the investor)

MiKaDiv vs. FASTER

The aim of the EU Faster initiative is to ease the reclaim of WHT within the EU member states. The financial industry sees MiKaDiv as a first step, a blue print, for the upcoming EU FASTER initiative.

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WTS Global

Potential Areas of Support

Based on our broad and long-lasting work within the tax world of the financial industry and together with our global WTS network, we can help you with any question regarding MiKaDiv. We offer events on MiKaDiv to inform about the new reporting framework (please see calendar), we can help you analyzing your data in order to make you aware of the upcoming effort for MiKaDiv, we can help you with legal / tax matters originating from the new requirements of MiKaDiv and more.

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