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I am sorry, I am not financially fluent and I used the wrong term. Instead of "tax dividend" I should have said "tax credit", and instead of "share dividend" I should have just said "dividend".
After reading allanb's comments -
"But it gets better: in the final step of the tax calculation the tax credit (€504 in my example) is deducted from the tax you owe. It seems too good to be true, but I think it is true",
and "So I fully expect to pay no tax on my modest dividend, and to get the tax credit as well. Maybe there is a Father Christmas",
and "Unfortunately I can't confirm the treatment of the tax credit because the simulation program doesn't have a place for it. But what the heck - report it. If it reduces your tax (as I think it will) it's a bonus".
In my simple mind I thought that this meant that those who have a small dividend not only do not pay tax on that dividend, but they also get a tax credit for the unused amount of tax free dividend which is then used to reduce the total tax bill.
Projecting this onto my tax return where I have no dividend income to report, I wondered if I would receive a tax credit for the tax free dividends that I do not have and do not claim, and whether this tax credit would reduce my tax bill. I hope I have made myself clear this time, Is it clear?
In other words does this tax credit apply only to those with dividends, which seems unlikely, or does it apply to all?
If it only applies to those with dividends, perhaps I should buy a small amount of shares in order to arrive at a small dividend, and thus receive a tax credit for the balance in order to reduce my total tax bill.
If this tax credit applies to all, then does one have to claim it, or is it applied automatically?
Hope this is not being too stupid.
David
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