EDP's primary goal is to create value for its shareholders. We've been doing it since 1997, through the appreciation of EDP shares in the stock market and the distribution of dividends.
The payment and the amount of dividends to be distributed are subject to a proposal from the Executive Board and subsequent approval by the Shareholders' General Meeting.
On EDP Capital Markets Day, held on May 5, 2016 with foreign and Portuguese investors and analysts, the Executive Board decided to present the General Meeting with a proposal consisting of an annual "payout" between 65% and 75% of the recurring net income, having the minimum dividend per share paid in 2017 (€0.19/share).
(1) Figures converted from escudos to euros, rounded to three decimal places.
Gross dividend per share, in escudos, was 129$87 in 1997, and 140$00 in 1998 and 1999.
(2) After the stock-split, in 20 July 2000, each share was converted into five.
* Payout Ratio = Gross Dividend per share / Net Income per share
In EDP Capital Markets Day that took place on May 5, 2016, with national and international investors and financial analysts, the Executive Board of Directors said that will propose in the Annual General Meeting a payout between 65%-75% of recurrent net income with dividend per share from 2017 (0.19 euros) as a floor.
Looking for information on the last dividend payment dates, please visit the table above.
Dividends paid to corporate shareholders are subject to a 25% withholding tax rate which shall be considered as an advance tax payment (being deducted from the final tax to be paid by Portuguese resident entities).
This taxation may be avoid if certain requirements are met, namely if the shareholder (i) holds a participation higher than 5% of EDP’s share capital, (ii) for a minimum period of 24 months (or commitment to meet that period of time), (iii) is not a pass-through entity (i.e. a fiscally transparent entity) and (iv) the dividend payer is a corporation liable to corporate income tax (“CIT”), as EDP is.
Pension Funds and similar Funds, Saving Funds (retirement, education and retirement/education) and Organizations of Public and Social Interest (duly recognized by the Portuguese State) are exempt of withholding tax. Investment Funds are taxable as individual shareholders.
Dividends paid to individual shareholders are subject to a 28% withholding tax rate. However, resident investors may opt to include these dividends in its total taxable income benefiting from a tax reduction of 50% and being liable to the progressive tax rates set forth in the Personal Income Tax Code. If such option is made, any withholding shall be deemed as an advance tax payment.
Dividends paid to corporate shareholders are subject to a domestic withholding tax rate of 25%.
However, dividends may be tax exempt in Portugal when paid to the residents of:
the EEA, provided that those countries are bounded by an agreement for tax cooperation within the scope agreed within the EU;
a country with which Portugal has signed a tax treaty with an exchange of information mechanism, and
In order to apply for this tax exemption some conditions must be met such as:
A 5% share participation for at least 24 months before the distribution, and
The company receiving the dividends should be liable to CIT; or to a tax listed in the EU parent subsidiary directive, or to a tax comparable to the Portuguese CIT at a nominal rate corresponding to at least 60% of the Portuguese rate.
In what regards Switzerland, the minimum holding requirements are increased to a 25% share participation for at least 2 years. Additionally, within the terms of double taxation treaties signed by Portugal and by Switzerland neither the parties may be deemed as resident for tax purposes in a third country and both entities must be subject to corporate tax and incorporated as limited liability companies.