Federal Ministry of Finance: If the capital gain is not taxable in Germany,

the correspondent dividends are taxed.

With its circular letter dated 26 July 2013, the Federal Ministry of Finance comments on the tax consequences of a sale of dividend claims to third parties by non-resident taxpayers.

The following factual background shall be taken as the starting point for purposes of this article: Prior to the shareholders’ meeting of a German stock corporation (Aktiengesellschaft), a non-resident taxpayer who is a shareholder of such corporation sells his claim for a (future) dividend to a third party while remaining shareholder of the corporation (i.e. the shareholder does not sell his shares in the corporation). After having received the dividend, the shareholder passes on the dividend to the purchaser of the dividend claim.