Dividend investing in Germany: a complete guide

June 5, 2026 · 6 min read

Germany offers some of the best dividend stocks in Europe. Companies like BMW, Allianz, and Mercedes-Benz regularly pay 4-8% yields. German tax on dividends: The Abgeltungsteuer (flat tax) is 26.375% on all investment income. This includes 25% capital gains tax plus 5.5% solidarity surcharge. Church tax may add another 0.5-0.7%. Freistellungsauftrag (tax-free allowance): Every German resident gets a EUR 1,000 annual exemption (EUR 2,000 for married couples). Set this up with your broker to avoid paying tax on your first EUR 1,000 of dividends. Most beginners forget this step and overpay taxes. Top DAX dividend stocks: BMW.DE pays approximately 6.2% yield at EUR 4.40 per share. Allianz (ALV.DE) pays around 4.6% yield at EUR 13.80 per share. Mercedes-Benz (MBG.DE) offers roughly 7.8% yield at EUR 5.30 per share. Deutsche Telekom (DTE.DE) pays about 3.5% yield at EUR 0.77 per share. A practical strategy: Invest EUR 25,000 across 5 high-yield DAX stocks. At an average 5% yield, you earn EUR 1,250 gross per year. EUR 1,000 is tax-free thanks to your Freistellungsauftrag. You pay only EUR 66 tax on the remaining EUR 250. Net income: EUR 1,184 per year for doing nothing.