Treasury benefits from the corporate dividend bonanza

The companies’ very high profits and the resulting dividends do not harm the state treasury. In the first half of the year, income from withholding tax on dividends rose by no less than 86 percent to a record 2.5 billion euros.

The strong increase in corporate dividends is a big windfall not only for investors, but also for the treasury. The 2.5 billion euros in withholding tax collected by the tax authorities on dividends in the first half of the year is almost twice as much as in 2020 and 2021 and more than half that in the years before the pandemic. The extra yield more than offsets the total drop in the two pandemic years.

KBC paid out an unusually high dividend in May.

“More than half of these extraordinary revenues in the first half of the year stem from dividends paid in May,” says Federal Public Service Finance. KBC in particular paid out unusually high at the time. The bancassurer paid 7.6 euros gross per share in May, compared to just 0.44 euros last May. Of this, 2 euros was a deferred dividend for the financial year 2020. KBC paid out more than 3 billion euros in the first half of the year compared to 183 million in the same period last year.

Eurozone banks are no longer subject to the European Central Bank’s restrictions. Banking regulators limited dividends during the pandemic to protect the sector’s capital buffers.

The essence

  • Income from withholding tax on dividends increased by 86 percent in the first half of the year to a record high of DKK 2.5 billion.
  • KBC paid out an unusually high dividend.
  • Many other companies also sharply increased their dividends as profits rose sharply in 2021 after the recession of 2020.
  • The earnings outlook is very uncertain due to the looming recession.

Record profit margin

KBC was not the only company to bring good news to its shareholders. KBC Ancora, Bekaert, Bois Sauvage, VGP and Van de Velde also increased their dividends significantly.

All Belgian listed companies together increased their dividend for the 2021 financial year by 56 percent to around 10 billion euros. The majority of this has been paid out in the first half of 2022. In addition, there are also dividends from unlisted and foreign companies and from investment funds. Of this, 30% withholding tax is also charged.

Dividends from Belgian listed companies rose by 56 percent to 10 billion euros.

Many companies were able to significantly increase their dividends because they had an excellent year. The gross profit margin of Belgian non-financial companies rose to a record 45.1 percent in 2021 because many companies were able to pass on the cost increases quite easily. The strong economic recovery after the severe recession in 2020 also boosted profits. The net profit of Belgian listed companies rose above 20 billion euros for the first time in 2021.


The earnings outlook for 2022 is very uncertain. On the one hand, gross profit continued to rise in the first quarter to a record 46.7 percent. Several listed companies have already published half-year results that are better than expected. On the other hand, there are more and more signs that economic growth is in danger of stalling in the second half of the year. This will make it more difficult for companies to continue to pass on the large cost increases.

The looming recession will make it more difficult to pass on the large cost increases.

It seems that the dividend and thus also the income from the withholding tax will fall next year. Dividends from KBC and KBC Ancora will almost certainly fall to a ‘more normal’ level. Telenet announced it will cut its dividend by two-thirds, and a repeat of bonus dividends like Bois Sauvage is unlikely.

Leave a Comment