Dividend in kind
The dividend in kind is that part of the profit that a stock corporation pays out not as money but in real assets (e.g. the company's products).
Distribution in the form of products and services
In some cases, shareholders receive products or services from the company at reduced rates or free of charge as part of or instead of the dividend.
A few examples: Hapimag gives you the right to live in the company's own holiday complexes as a dividend in kind. The Zurich Zoo offers its shareholders free admission on one day of the year.
Catering at the general meeting
The term “dividend in kind ” is also used to describe catering for the shareholders during the general meeting in the form of food and beverages. In addition to the actual dividend and share price gains, the dividend in kind represents an additional incentive for many shareholders to invest in a company or to attend the meeting.
Small investors benefit disproportionately from the dividend in kind at general meetings of companies of different sizes and from different sectors, as this, in contrast to the actual dividend and price gains, is not calculated from the proportionate ownership in the company, but is only derived from the presence of the shareholder at the general meeting. The Swabian Bank in Stuttgart brought this 1987-2005 year the so-called culinary AGM leader Swabian shares - "zom Fressa'gern" out. The brochure, which is popular with small shareholders, was discontinued because the stock corporations no longer provided the necessary data on the planned entertainment.
It is often observed that abusively natural dividends are filled into containers brought along during the event and thus used for later domestic consumption.
Tax treatment
In principle, a natural dividend in the sense of the discounted sale of products and services is also subject to income tax under German tax law. However, dividends in kind do not play a significant role in tax practice.
In Swiss tax law, the dividend in kind is set out in Art. 24 Paragraph 1 lit. c VStV.
