the overall tax rate is lower, you also dont pay social security contributions. try getting a 50K dividend only payment vs a 50K payment via payroll. it's night and day

Ok, but I was responding to the OP claim that dividends were subject to a flat 20% rate. This is not the case - dividend income is added to your earned income for income tax purposes.

It's added but taxed differently. You are correct, I got the details wrong. I should have just written there are tax advantages to not being PAYE. Writing a concrete number (especially when I wasn't sure about the details), was bad.

In what European jurisdictions? For example in Slovakia dividends are taxed by a special tax rate (8% previous years, 10% from 2024) and that's all, so it's pretty good compared to the standard cca 20% (different tax rates, not sure which one applies when + there is some untaxed minimum but not much). In addition to that, if you are employed, you are paying (relatively huge) social and health insurance too, which you don't have to pay from dividends.

I’ve been a tax payer in Ireland, Switzerland and the UK. Dividends are treated as income in all three. However, from some superficial googling, it seems these 3 are not a particularly representative sample - without fully researching it, it looks like this approach to dividend income is not the way the majority do it although that doesn’t mean you save money by paying yourself dividends as the tax rates are often higher than income tax rates.