Dividends

According to our dividend policy, dividend payouts of Henkel AG & Co. KGaA shall, depending on the company’s asset and profit positions as well as its financial requirements, amount to 30 to 40 percent of net income after non-controlling interests and adjusted for exceptional items. We will propose to the Annual General Meeting a stable dividend relative to the previous year of 1.85 euros per preferred share and 1.83 euros per ordinary share for the fiscal year just ended. This equates to a payout ratio of 42.4 percent, which is slightly above the target bandwidth of 30 to 40 percent. Thus we are able to maintain dividend continuity for our shareholders. This payout is possible thanks to the strong financial base and the positive development of the net financial position of the Henkel Group.

Taxation of dividends

The dividends on both ordinary shares and preferred shares are principally paid net of taxes. Capital gains tax at 25 percent and the solidarity surcharge at 5.5 percent of the capital gains tax amount ‏(total 26.375 percent), and church tax where applicable, have already been deducted ‏(withheld). Dividends are taxed in the case of residents of Germany in accordance with the provisions of German income tax law and German corporation tax law.

The tax withheld covers in full the German income tax payable on relevant private capital gains ‏(and is hence known in German as “Abgeltungssteuer” or flat-rate tax). Irrespective of this, shareholders can apply to have the dividends included with all other income made in the calendar year in their personal income tax return where this leads to a lower overall level of income tax payable ‏(known in German as the “Günstigerprüfung” or more favorable tax treatment).

The circumstances of the individual shareholder ‏(e.g. if in possession of a “Nicht-Veranlagungsbescheinigung” ‏(non-assessment certificate) or "Freistellungsauftrag" ‏(exemption order for capital gains)) may allow for a payment to be made without deduction. The circumstances could furthermore allow an application for repayment of the withheld capital gains tax, the solidarity surcharge and - if applicable - church tax.

In the case of a shareholder residing outside of Germany, the withheld capital gains tax and solidarity surcharge may be reduced, depending on the terms of any conventions for the avoidance of double taxation that exist between the Federal Republic of Germany and the country of residence concerned. Shareholders who are residents outside of Germany are recommended to seek professional advice on the tax treatment of dividends.

If more detailed advice is required regarding the tax treatment of dividends in Germany, shareholders should obtain this individually from their local tax office ‏(“Finanzamt”) or seek professional advice from a certified German tax consultant ‏(“Steuerberater”).