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• An entity incorporated under Spanish law
• An entity having its legal headquarters in Spain or its effective place of management in Spain
In addition, the tax authorities may presume that an entity resident in a tax haven or in a country with no income taxation is tax resident in Spain if any of the following circumstances exist:
• The majority of its assets is directly or indirectly located in Spain.
• A majority of its rights may be exercised in Spain.
• The principal activity of the entity is carried out in Spain.
The above measure does not apply if business reasons justify the effective performance of operations and exercise of management in such foreign jurisdiction.
Nonresident entities are taxable only on Spanish-source income, which includes income from any kind of business activity conducted in Spain through a branch, office or other permanent establishment. Nonresident companies or individuals must appoint a fiscal representative if they are conducting business activities in Spain through a permanent establishment (exceptions apply) or if certain other specified circumstances occur.
Tax rates. The general tax rate for residents and nonresidents that conduct business activities in Spain through a permanent establishment is 25%.
For tax periods starting on or after 1 January 2022, a minimum tax payment of 15% corporate tax over the taxable base has been introduced. The taxable base is calculated as the accounting profit plus or minus book-to-tax adjustments (such as the disallowance or limitation of certain expenses or participation exemption). This minimum tax payment applies to the following groups:
• Companies that had more than EUR20 million in revenue during the 12 months preceding the start of the tax year
• Companies that are taxed as part of a tax unity (for example, consolidated tax group), regardless of their revenue
• Foreign companies that obtain income through a Spanish permanent establishment and are subject to the nonresidents income tax
Companies may not use credits and incentives (for example, research and development (R&D) tax credits) to reduce their income tax liability below the minimum tax threshold, except for foreign tax credits and certain tax incentives (bonificaciones), which must be applied first. The tax liability resulting from applying the general corporate income tax rate to the taxable base and after the application of certain tax credits may not be below this minimum corporate income tax liability. Unutilized tax credit resulting from this new rule may be carried forward.
Newly incorporated entities carrying out business activities are taxed at a special rate of 15% in the first fiscal year in which the entity has a positive tax base and in the following year, regardless of the amount of the tax base (a 10% minimum tax payment applies to newly created companies for tax periods starting on or after 1 January 2022). However, this special tax rate does not apply in certain cases, such as the following:
• Newly incorporated entities carrying out economic activities previously carried out by related entities
• Newly incorporated companies belonging to a group of companies
• Entities qualifying as passive entities (entidades patrimoniales), which are entities that have more than 50% of their assets constituted by shares or other assets not linked to a business activity
For tax periods initiated on or after 2023, the general tax rate is reduced from 25% to 23% for those entities (small-sized companies) with a turnover not exceeding EUR1 million during the 12 months preceding the start of the tax year.
Additionally, entities that have the status of “start-up” company in accordance with requirements regulated in Law 28/2022 will be taxed at a special rate of 15% in the first fiscal year in which the entity has a positive tax base and in the following three years.
In addition to other tax benefits, companies licensed to operate in the Canary Islands Special Zone (Zona Especial Canaria, or ZEC) are subject to a reduced tax rate of 4% if certain conditions are satisfied. This reduced rate applies up to a maximum amount of taxable income, equaling the lesser of the following:
• The ratio of income derived from qualified ZEC transactions with respect to total income
• The amount resulting from the sum of the following amounts: EUR1, 800,000 for those entities within the ZEC that fulfill the minimum job creation requisites (that is creation of three or five jobs annually, depending on the island)
An additional EUR500,000 for each job created exceeding the minimum job creation requirements, up to 50 jobs
The tax reduction resulting from the application of the above rule (this reduction is calculated by comparing the corporate income tax paid to the tax that would have been due under the general corporate income tax rate) cannot be greater than the following:
• 17.5% of the ZEC entity’s turnover for an entity in the industrial sector
• 10% of the ZEC’s entity’s turnover for an entity in a different sector
Specific tax rates apply to, among others, non-governmental organizations, charities, certain cooperatives, investment fund entities meeting certain requirements and financial institutions.
In general, nonresidents operating in Spain without a permanent establishment are taxable at a rate of 24%. This tax rate is reduced to 19% for income derived by European Union (EU) or European Economic Area (EEA) tax residents in a jurisdiction with which an effective exchange of tax information agreement is in place. Nonresidents without a permanent establishment that operate in Spain and that are resident in an EU Member State and that can prove that their expenses are directly linked to their Spanish-source income and have a “direct and fully inseparable nexus” with the activity performed in Spain may deduct any expenses allowed by the following:
• The Personal Income Tax Law, as provided in Law 36/2006, 28 November (this law also refers to the Corporate Income Tax
For licensing agreements entered into from 30 September 2013 to 30 June 2016, the licensing entities may opt for applying the Spanish Patent Box Regime in accordance with the law in force from 1 January 2015.
In general, these transitory regimes will remain applicable until 30 June 2021. After this date, the amended Spanish Patent Box Regime will be the only applicable regime.
In addition, gains derived from the sale of the IP assets made from 1 July 2016 to 30 June 2021 (or, exceptionally until 31 December 2017 regarding certain sales occurring between related parties) may also benefit from the application of the reduction in accordance with the law in force as of 1 January 2015. The option should be made in the tax form corresponding to the period in which the assets are sold.
Capital gains. Spanish law generally treats capital gains as ordinary income taxable at the regular corporate tax rate.
Capital gains realized by nonresidents without a permanent establishment in Spain are taxed at a rate of 19%. Capital gains on movable property, including shares, are exempt from tax if the recipient is resident in an EU country that is not on the Spanish tax haven list or (effective 1 January 2021) in a state in the EEA under an effective exchange of information with Spain, unless the gains are derived from the transfer of shares and any of the following circumstances exists:
• The company’s assets directly or indirectly consist primarily of Spanish real estate.
• For an EU/EEA shareholder who is an individual, he or she has held at least a 25% interest in the Spanish company at any time during the prior 12 months.
• For an EU/EEA shareholder that is a legal person, it has not held a minimum ownership percentage of 5% and a one-year minimum holding period in the subsidiary has not been met.
If a nonresident that does not have a permanent establishment in Spain disposes of Spanish real estate, a 3% tax is withheld by the buyer from the sale price, with certain exceptions. The tax withheld constitutes an advance payment on the final tax liability of the seller.
Capital gains derived by nonresidents without a permanent establishment in Spain from the reimbursement of units in Spanish investment funds or from the sale of shares traded on a Spanish stock exchange are exempt from tax in Spain if the seller is resident in a jurisdiction that has entered into a tax treaty with Spain containing an exchange of information clause.
Administration. The tax year is the same as the accounting period, which may be other than a calendar year. The tax year may not exceed 12 months. The tax return must be filed within 25 days after six months following the end of the tax year. In April, October and December of each calendar year, companies and permanent establishments of nonresident entities or individuals must make payments on account of corporate income tax or nonresidents income tax, respectively, equal to one of the following:
• Eighteen percent of the tax liability for the preceding tax year.
• An amount calculated by applying 19/20 (for entities with net turnover of more than EUR10 million) or 5/7 (for entities with net turnover not exceeding EUR10 million) of the corporate income tax rate (that is, 24% or 17%, respectively, if the corporate tax rate is the general rate of 25%) to the profits for the year as of the end of the month preceding the date of the payment and then subtracting from the result tax withheld from payments to the company and advance payments of tax previously made. This alternative is compulsory for companies with turnover of more than EUR6 million in the immediately preceding tax year.
• For taxpayers with net turnover of more than EUR10 million in the immediately preceding tax year, a minimum interim payment of 23% of the taxpayer’s accounting result after taxes (regardless of eventual applicable book-to-tax adjustments and the pending application of a tax-loss carryforward), reduced by the amount of previous payments on account corresponding to the same fiscal year. As a result, for taxpayers with net turnover of more than EUR10 million, the interim payment is the higher of the following:
24% to the profits (tax base) for the year as of the end of the month preceding the date of the payment, reduced by the tax withheld from payments to the company and advance payments of tax previously made
23% of the positive accounting profit for the year as of the end of the month preceding the date of the payment, reduced by tax withheld from payments to the company and advance payments of tax previously made
Statute of limitations. Although the Spanish tax law provides that the statute of limitations period is four years, the Corporate Income Tax Act provides that tax losses and tax credits may be subject to tax audit for a period of 10 years from the tax year of generation. It also contains provisions enabling the tax auditors to review transactions implemented in statute-barred years if they produce effects in non-statute barred periods.
Participation exemption regime and foreign tax relief. The exemption method may be used to avoid double taxation on dividends received from Spanish resident and non-Spanish resident subsidiaries and on capital gains derived from transfers of shares issued by such companies. However, as a result of the 2021 Budget Bill, effective for fiscal years starting on or after 1 January 2021, the former full participation exemption method on qualifying dividends and capital gains is reduced to a 95% partial exemption. Consequently, a 1.25% (1.50% for financial entities) effective tax rate should be expected on these sources of income. Exceptionally, a full participation exemption may still be available for a threeyear period under certain conditions to avoid double taxation of dividends or capital gains flowing from newly incorporated entities.
To qualify for this exemption, the following requirements must be met:
• At the time of the distribution of the dividend or the generation of the capital gain, the Spanish company has owned, directly or indirectly, at least 5% of the share capital of the resident or nonresident company for an uninterrupted period of at least one
• The period in which the assets are further written off by the buyer
• The period in which the buyer resells the assets to a third party outside the group of companies
• The period in which the seller or the buyer leaves the group of companies
For depreciable assets, the deduction is claimed during their useful life.
Deduction of tax losses derived from the sale of shares in subsidiaries in which the buyer is a company of the same group of companies as the seller is deferred until the shares are resold to a third party outside the group or until the buyer or the seller leaves the group of companies. However, such deferred tax losses are deductible only with respect to the sale of non-qualifying participations (see Participation exemption regime and foreign tax relief in Section B); in the case of nonresident subsidiaries, they must also meet the 10% minimum taxation requirement. In addition, the tax losses may be reduced by the exempt gains recognized by the related-party buyer on the sale to a third party outside the group.
Capital losses derived from the sale of qualifying participations are not deductible.
Capital losses derived from the sale of non-qualifying participations may be deductible, but reduced by the amount of exempt dividends received since 2009 and by the amount of exempt gains recognized by a related-party seller in the purchase by the Spanish company.
The deduction of losses derived by the dissolution of subsidiaries may be reduced by exempt dividends recognized in the preceding 10 years.
Capitalization reserve. Taxpayers may reduce their tax base by an amount equal to 10% of the increase of their net equity in a given year if they book a non-distributable reserve corresponding to the tax base reduction and keep it in their balance sheet for five fiscal years.
The reduction is calculated as 10% of the difference between the net book value of the company at the beginning of the year (excluding the preceding year’s accounting result) and the net book value at the end of the financial year after deducting negative adjustments, up to a maximum limit of the positive taxable base before the utilization of any tax loss carryforward. Any amount exceeding this limit will be carried forward to the following two years.
Hybrid
instruments. The new Spanish Corporate Income Tax Act introduces certain amendments to anti-abuse rules in accordance with the Organisation of Economic Co-operation and Development (OECD) Base Erosion Profit Shifting (BEPS) project. In this regard, a special anti-abuse provision for hybrid instruments prevents the deductibility of expenses incurred in transactions with related parties in which as a result of different tax characterizations, any of the following circumstances would exist:
• Income would not be subject to tax.
• No income would be generated to the counterparty.
• The income would be subject to a nominal tax rate below 10%.
In addition, intragroup profit-sharing loans are characterized as equity instruments for Spanish tax purposes. Consequently, interest expenses derived from profit-participating loans are not tax deductible for the borrower. In line with such treatment, interest income derived from intragroup profit-sharing loans qualifies as a dividend that is exempt for the lender under the participation exemption regime (see Section B).
Furthermore, Spain has implemented the EU Anti-Tax Avoidance Directive (Council Directive 2017/952 of 29 May 2017 or EU ATAD 2) into the Spanish corporate income tax and nonresident income tax provisions, effective from 11 March 2021. Under these newly implemented rules, expenses are not deductible or income must be taken into account, if specified mismatches occur, such as deductions without inclusion, double deductions, hybrid or disregarded permanent establishments or dual residencies. Legal and factual analysis is necessary to determine whether a specified transaction or arrangement falls within the definition of non-permitted mismatches.
Inventories. The corporate tax law does not prescribe permissible methods for the valuation of inventory. Consequently, any valuation method allowed under the Spanish accounting rules may be used for tax purposes. Weighted average price is the generally accepted method, but first-in, first-out (FIFO) is also accepted. A common method is required with regard to inventories of the same nature and use.
Provisions. Provisions that are properly recorded are generally taxdeductible except for those specified by law.
Depreciation. All fixed or movable tangible assets (except land) that are owned by and used in the trade or business of a company are depreciable if their useful life exceeds a tax year. Intangible assets, such as patents, may be amortized during their useful life if they depreciate and have a limited and clearly defined useful life. Intangible assets whose useful life cannot be estimated reliably are amortized at an annual rate of 5%.
Goodwill is amortized at an annual rate of 5%.
Under certain conditions, Spanish-resident entities may amortize for tax purposes the financial goodwill embedded in shares of qualified foreign subsidiaries with respect to the following acquisitions:
• Acquisitions carried out before 21 May 2011 in non-EU countries if it can be proven that cross-border mergers cannot be accomplished
• Other acquisitions carried out before 21 December 2007
The amortization of financial goodwill is set at a maximum rate of 5%.
Depreciation methods are restricted to the straight-line method and the declining-balance method. The straight-line method may be used for any depreciable asset. The declining-balance method may be used only for certain new tangible assets (industrial and
farming machinery, vehicles, information systems and so forth) that have an anticipated useful life of three years or more.
The basis for depreciation is the acquisition price of assets purchased by the company or the manufacturing cost of assets manufactured by the company. The acquisition price includes all related costs, such as customs duties, transportation costs and installation expenses.
Maximum depreciation rates for tax purposes are fixed by law. The following are general straight-line rates and periods of depreciation for certain assets.
Companies may use higher rates if they can demonstrate that the actual depreciation is in excess of that allowed by law.
To be deductible, the depreciation amount must be recorded in the company’s accounting books and must be “effective”; that is, it must correspond to the actual depreciation of the asset. The second condition is met if the depreciation amount is calculated in accordance with the rates prescribed by law or with other rates that have been expressly approved by the tax authorities. Otherwise, the “effectiveness” of the depreciation must be demonstrated. On request, the tax authorities may grant approval for accelerated depreciation if the company presents a plan specifying the assets, the date and price of the acquisition, the depreciation rates and the annual depreciation allowance desired, and reasons to support the adoption of such a plan.
Investments in new tangible assets and real estate in Spain or abroad carried from 2009 through 31 March 2012 may qualify for a free tax depreciation allowance. For investments made during tax years that began during 2009 and 2010, such tax benefit is conditioned on the maintenance of the level of employment. Any depreciation allowance on such assets that was pending to be fully accelerated by 31 March 2012 is still available for use but is subject to certain limitations. New fixed assets can be freely depreciated on an annual basis if their unit cost is below EUR300, with an overall cap of EUR25,000.
Relief for losses.
Net operating losses can be carried forward indefinitely (no expiration period) with an annual limit of 70% of the positive tax base before the application of the capitalization reserve tax reduction (see Capitalization reserve). The limitation applies to losses in excess of EUR1 million.
Certain restrictions applicable in previous years (tax loss offset capped to a maximum of 50% or 25% of taxable income, based on the turnover of the taxpayer) have been declared inoperative by decision of the Constitutional Court dated 18 January 2024. It
Additional rules for leveraged acquisitions limit the deductibility of interest on loans to purchase shares (acquisition debt) to 30% of the operating profit of the acquiring entity. The limitation applies if the acquired and acquiring entities are merged within a four-year period or if new entities join the tax group in which the acquiring and acquired entity are included. Under an escape clause in the law, the limitation does not apply in the year of the acquisition if the acquisition debt does not exceed 70% of the consideration paid for the shares. In the following years, the limitation will not apply if the acquisition debt is proportionally repaid within an eight-year period until it is reduced to 30% of the total consideration.
Anti-avoidance legislation. To prevent fraud, the tax code contains several anti-avoidance measures in various chapters. Substanceover-form principles apply.
Controlled foreign companies. Under controlled foreign company (CFC) rules contained in the corporate income tax law, Spanish resident companies must include in their tax base certain passive income derived by their foreign subsidiaries if certain control and effective taxation conditions are satisfied. Significant exceptions apply to these rules.
These rules do not apply to EU-controlled subsidiaries if the Spanish shareholder proves that the incorporation of the foreign entity was undertaken for sound business reasons and such entity carries on business activities.
Effective from 1 January 2015, certain amendments to CFC rules were introduced. These include, among others, additional substance requirements to be met by the foreign subsidiary in order to avoid the imputation of the foreign low-taxed income.
Transfer pricing. Spanish law includes the arm’s-length principle and the requirement of documenting all related-party transactions. The arm’s-length principle applies to all transactions carried out by taxpayers with related parties. The following are the principal aspects of the law:
• Taxpayers must use arm’s-length values in their tax returns. As a result, taxpayers bear the burden of proof on transfer-pricing issues.
• OECD guidelines and pricing methodology apply.
• The law provides for secondary adjustments. Under this measure, if the agreed value in a transaction differs from the normal market value, the difference between the values is recharacterized by following a substance-over-form approach. In particular, for a transaction between a company and a shareholder, the difference (proportionally to the participation in the entity) is considered a dividend if such difference is in favor of the shareholder or a contribution by the shareholder to the entity’s equity if the difference is in favor of the entity.
• Advance Price Agreements (APAs) may be negotiated. They apply to the current year, the preceding four years and the following four years. The law allows APAs to have retroactive effect within the statute-of-limitations period.
• Statutory documentation requirements in line with the guidelines of the EU Joint Transfer Pricing Forum entered into force on 19 February 2009. This documentation is required to support
the taxpayer’s transfer-pricing policy regarding domestic and international transactions.
• Penalties and delay interest may be imposed. If the documentation is correct, the tax authorities do not impose a penalty with respect to a transfer-pricing assessment. However, the absence (or incompleteness) of documentation is subject to penalties, even if no adjustments are assessed.
The Spanish Corporate Income Tax Act provides the following three exceptions to the obligation to prepare statutory transferpricing documentation:
• When the transaction takes place between entities that form part of a Spanish tax consolidated group
• When the transaction is carried out between members of an Economic Interest Grouping (Agrupaciones de Interés Económico) or a Temporary Business Alliance (Uniones Temporales de Empresas)
• When the transaction is carried out within the scope of a public stock offering
• When transactions with the same entity do not exceed EUR250,000 per year
Simplified documentation requirements apply to entities with a turnover that does not exceed EUR45 million, computed at the level of the mercantile group.
Some specified transactions must be documented in any case, such as transactions performed with group “related parties” that are tax resident in a tax-haven jurisdiction. Article 18.2 of the Spanish Corporate Income Tax Act provides a definition of “related parties.”
In addition, transactions performed with related or unrelated residents of listed tax havens must comply with the arm’s-length principle and are subject to statutory documentation requirements.
New Country-by-Country (CbC) Reporting obligations apply to Spanish tax resident groups if the consolidated group’s net turnover in the immediately preceding fiscal year exceeded EUR750 million. This obligation may also apply in certain cases to subsidiaries of foreign groups.
As of 1 January 2016, new transfer-pricing documentation rules require more detailed information (for example, intangible assets, financial activities, management structure, main competitors and reconciliation of data used in economic analyses with annual financial statements).
VAT Immediate Supply of Information System. Effective from the 2017 fiscal year, businesses and professionals who are required to file VAT returns on a monthly basis are subject to the new VAT Immediate Supply of Information System. Businesses and professionals who are required to file monthly returns if they meet any of the following conditions:
• They have revenue exceeding EUR6 million.
• They are included in the monthly refund regime.
• They are applying the VAT grouping provisions.
Under the new system, information related to all invoices issued or received, customs documents and accountancy documents, if
Dividends (a) Interest (b) Royalties % % %
Belgium 0/15 (m) 0/10 (d) 5
Bolivia 10/15 (e) 0/15 (d) 15
Bosnia and Herzegovina
5/10 (n) 0/7 (d) 7
Brazil 15 10/15 (o) 10/15 (p)
Bulgaria 5/15 (x) 0 0
Canada 5/15 (e) 0/10 0/10
Cape Verde 0/10 (l) 0/5 (d) 5
Chile 5/10 (q) 5/15 (r) 5/10 (s)
China Mainland 0/5/10 (tt) 0/10 (qqqq) 10
Colombia 0/5 (t) 0/10 (d) 10
Costa Rica (u) 5/12 (v) 5/10 (w) 10
Croatia 0/15 (x) 0 0
Cuba 5/15 (e) 0/10 (d) 5 (y)
Cyprus 0/5 (zzz) 0 0
Czech Republic (z) 5/15 (e) 0 5
Dominican Republic 0/10 (www) 0/10 (d) 10
Ecuador 15 0/5/10 (d)(aa) 5/10 (bb)
Egypt 9/12 (cc) 0/10 (d) 12
El Salvador 0/12 (dd) 0/10 (d) 10
Estonia 5/15 (e) 0/10 (d) 5/10 (ee)
Finland 10/15 (e) 0 0
France 0/15 (ff) 0/10 (d) 5
Georgia 0/10 (hh) 0 0
Germany 5/15 (e) 0 0
Greece 5/10 (ii) 0/8 (d) 6
Hong Kong SAR 0/10 (l) 0/5 (d) 5
Hungary 5/15 (e) 0 0
Iceland 5/15 (e) 5 (jj) 5
India 15 15 (g) 10/20 (kk)
Indonesia 10/15 (e) 0/10 (d) 10
Iran 5/10 (ll) 0/7.5 (d) 5
Ireland 0/15 (m) 0 5/8/10 (mm)
Israel 10 5/10 (nn) 5/7 (oo)
Italy 15 0/12 (d) 4/8 (pp)
Jamaica 5/10 (qq) 0/10 (d) 10
Japan 0/5/10 (oooo) 0/10 (pppp) 0
Kazakhstan 5/15 (rr) 0/10 (d) 10
Korea (South) 10/15 (e) 0/10 (d) 10
Kuwait 0/5 (zzz) 0 5
Latvia 5/10 (ss) 0/10 (d) 5/10 (ee)
Lithuania 5/15 (tt) 0/10 (d) 5/10 (s)
Luxembourg 10/15 (e) 0/10 (d) 10
Malaysia 0/5 (vv) 0/10 (d) 5/7 (ww)
Malta 0/5 (xx) 0 0
Mexico 0/10 (hhhh)0/4.9/10 (iiii) 0/10 (y)
Moldova 0/5/10 (zz) 0/5 (d) 8
Morocco 10/15 (e) 10 5/10 (bb)
Netherlands 5/10/15 (e)(aaa) 10 6
New Zealand 15 10 (jj) 10
Nigeria 7.5/10 (cccc) 0/7.5 (d) 3.75/7.5 (dddd)
North Macedonia 5/15 (uu) 0/5 (d) 5
Norway 10/15 (e) 0/10 (d) 5
Oman 0/10 (eeee) 0/5 (d) 8
Dividends (a) Interest (b) Royalties % % %
Pakistan 5/7.5/10 (bbb) 10 (ccc) 7.5
Panama (ddd) 0/5/10 (eee) 0/5 (d) 5
Philippines 10/15 (e) 0/10/15 (d)(fff) 10/15/20 (ggg)
Poland 5/15 (e) 0 0/10 (hhh)
Portugal 10/15 (e) 15 5
Qatar 0/5 (jjjj) 0 0
Romania 0/5 (zzz) 0/3 (d) 3
Russian Federation 5/10/15 (iii) 5 (jjj) 5
Saudi Arabia 0/5 (kkk) 0/5 (d) 8
Senegal 10 0/10 (d) 10
Serbia 5/10 (ii)(lll) 0/10 (d)(lll) 5/10 (lll)(mmm)
Singapore 0/5 (hh)(nnn) 0/5 (d) 5
Slovak Republic (z) 5/15 (e) 0 5
Slovenia 5/15 (e) 0/5 (d) 5
South Africa 5/15 (ffff) 0/5 (d) 5
Sweden 10/15 (e) 15 10
Switzerland 0/15 (vv) 0 5 (ppp)
Thailand 10 0/10/15 (g) 5/8/15 (mm)
Trinidad and Tobago 0/5/10 (zz)(qqq) 0/8 (d)(qqq) 5 (qqq)
Tunisia 5/15 (bbb) 5/10 (rrr) 10
Türkiye 5/15 (sss) 10/15 (ttt) 10
United Arab Emirates (rrrr) 5/15 (vvv) 0 0
United Kingdom 0/10/15 (aaaa) 0 0
United States 0/5/15 (mmmm) 0 (d) 0 (nnnn)
Uruguay 0/5 (www) 0/10 (d) 5/10 (xxx)
USSR (uuu) 18 0 5 (hhh)
Uzbekistan 5/10 (ffff) 0/5 (d) 5
Venezuela 10 (ppp) 4.95/10 (d)(yyy) 5
Vietnam 7/10/15 (gg) 0/10 (d)) 10
Non-treaty jurisdictions (h) 19 19 20/24 (bbbb)
(a) Distributions by Spanish subsidiaries to parent companies in EU Member States are exempt from withholding tax if the parent company owns at least 5% of the subsidiary for an uninterrupted period of at least one year and if certain other requirements are met. The one-year holding period requirement may be satisfied at the date of the distribution or subsequent to such date. An anti-avoidance provision also applies in situations in which the ultimate shareholder is not an EU resident.
(b) Interest paid to an EU resident without a permanent establishment in Spain is exempt from tax if the EU country is not on the Spanish tax haven list.
(c) The 0% rate applies if the beneficial owner of the dividends is a company (other than a partnership) that directly controls at least 75% of the capital of the distributing company. The 5% rate applies if the beneficial owner of the dividends is a company (other than a partnership) that directly controls at least 10% of the capital of the distributing company. These rates only apply if the shareholding condition is met for a period of at least 365 days including the date of payment of the dividend (but ownership changes directly resulting from reorganizations are disregarded for these purposes).
(d) Certain interest payments are not subject to withholding tax if the recipient is a qualified entity such as the government, the central bank, a qualified pension fund or any subdivision of the other contracting state, or a financing institution. In the particular case of the double tax treaty between Spain and the United States, as a general rule, interest payments are not subject to withholding tax.
(tt) The 0% rate applies if the beneficial owner of the dividend is, among others, the state (or its subdivisions), public entities or companies fully owned (directly or indirectly) by the state or the central bank of the other contracting state. The 5% rate applies if the beneficial owner of the dividend is a corporation (other than a partnership) that controls at least 25% of the capital of the distributing company. The withholding tax rate is 10%/15% for other dividends.
(uu) A 15% rate applies if the shareholding is less than 10%.
(vv) A 0% rate applies if the beneficial owner holds at least a specified percentage of the share capital of the distributing entity and if certain other conditions are met.
(ww) A 5% rate applies to income derived from the rendering of technical services.
(xx) A 5% rate applies if the shareholding is less than 25%.
(yy) The withholding tax rate is 10% if the beneficial owner of the interest is a financial entity.
(zz) The 0% rate applies if the dividends are received by a company that holds directly or indirectly a shareholding of at least 50% in the capital of the distributing company. A 5% rate applies if the direct shareholding is more than 25% but less than 50%. Otherwise, a 10% rate applies.
(aaa) The withholding rate is 5% if the recipient is not subject to Dutch tax on the dividends and if the 10% rate would otherwise apply.
(bbb) The 5% rate applies if the beneficial owner of the dividends is a company that has owned directly at least 50% of the voting shares of the distributing company (this requirement needs to be met in the year before the dividend distribution takes place). The 7.5% rate applies if the beneficial owner of the dividends is a company that has owned directly at least 25% of the voting shares of the distributing company. The shareholding condition for both the 5% and the 7.5% rates must be met for a period of at least 365 days, including the date of payment of the dividend (but ownership changes directly resulting from reorganizations are disregarded for these purposes).
(ccc) Certain interest payments are not subject to withholding tax.
(ddd) Tax treaty provisions do not apply if the dividend, interest or royalties paid by a Panamanian resident are sourced in Spain or in a country that has not entered into a tax treaty with Spain and if such income has not been effectively taxed in Panama.
(eee) The 0% rate applies if the beneficial owner of the dividends is a capital company that directly controls at least 80% of the capital of the distributing company and if certain conditions are satisfied. The 5% rate applies if the beneficial owner of the dividends is a company (other than a partnership) that directly controls at least 40% of the capital of the distributing company.
(fff) A 10% rate applies to interest paid with respect to sales of industrial equipment or publicly traded bonds.
(ggg) A 20% rate applies to royalties paid with respect to films, television or radio. A 10% rate applies to royalties derived in preferred areas of activities.
(hhh) A 0% rate applies to royalties paid for copyrights of literary, dramatic, musical or artistic works (excluding motion picture films and television films or videotapes).
(iii) The withholding tax rate is 5% both of the following conditions are met in the year before the dividend distribution takes place:
• The beneficial owner of the dividends is a company that has invested at least EUR100,000 in the share capital of the payer.
• The dividends are exempt from tax in the other contracting state. The withholding tax rate is 10% if only one of these requirements is met. The withholding tax rate is 15% for other dividends.
(jjj) No withholding tax is imposed on interest paid to and beneficially owned by financial institutions or with respect to long-term (seven years or more) loans and certain other debts.
(kkk) A 0% rate applies if the beneficial owner of the dividends is a company that directly controls at least 25% of the capital of the distributing company.
(lll) A most-favored-nation clause applies.
(mmm) The 5% rate applies to royalties paid for the use of copyrights of literary, artistic or scientific works, including cinematographic films or films or tapes used for radio or television broadcasting, but excluding computer software. The 10% rate applies to royalties paid for the use of patents, trademarks, designs or models, plans, secret formulas or processes and computer software, for the use of, or the right to use, industrial,
commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience.
(nnn) The 5% rate applies if the distributing company is a stock-listed real estate investment company and if the beneficial owner of the dividends directly or indirectly controls less than 10% of the capital of the distributing company.
(ooo) The 5% rate applies to royalties paid for the use of patents, trademarks, designs or models, plans, secret formulas or processes and computer software, for the use of, or the right to use, industrial, commercial or scientific equipment. The 10% rate applies in all other cases.
(ppp) A 0% rate applies if certain conditions are met.
(qqq) A limitation-of-benefits clause in the treaty may apply.
(rrr) A 5% rate applies to loans over seven years.
(sss) A 5% rate applies to certain dividend distributions.
(ttt) A 10% rate applies to interest derived from loans granted by banks or in connection with sales on credit of merchandise or equipment. The 15% rate applies in all other cases.
(uuu) Spain honors the double tax treaty with the former USSR with respect to Kyrgyzstan, Tajikistan, Turkmenistan and Ukraine.
(vvv) A 5% rate applies if the beneficial owner of the dividends is a corporation that holds directly at least 10% of the entity paying the dividends. Nevertheless, this rate does not apply if the primary intent, or one of the main objectives, of any individual associated with the holding or share that yields the dividends is to secure the benefits of this provision through such holding or share. The withholding tax rate is 15% for other dividends.
(www) The 0% rate applies if the beneficial owner of the dividends is a capital company that directly controls at least 75% of the capital of the distributing company. In the case of Uruguay, the shareholding condition for both the 0% and the 5% rates must be met for a period of at least 365 days, including the date of payment of the dividend (but ownership changes directly resulting from reorganizations are disregarded for these purposes).
(xxx) The 5% rate applies to royalties paid for copyrights of literary, artistic or scientific works.
(yyy) A 4.95% rate applies to interest paid to financial institutions.
(zzz) The 0% rate applies if the beneficial owner of the dividends is a company that directly controls at least 10% of the capital of the distributing company.
(aaaa) The 0% rate applies to dividends paid to a company that controls, directly or indirectly, at least 10% in the equity of the distributing company, provided that the recipient of the dividends is the beneficial owner. The 15% rate applies to dividends paid out of income (including capital gains) derived directly or indirectly from immovable property by an investment vehicle that distributes most of this income annually and whose income from such immovable property is exempt from tax. The 10% rate applies in all other cases.
(bbbb) The 20% rate applies to EU residents in jurisdictions with which an exchange of information agreement is in place.
(cccc) The 7.5% applies if the beneficial owner of the dividends is a company that directly controls at least 10% of the capital of the distributing company.
(dddd) The 7.5% rate applies if the beneficial owner of the royalties is a capital company.
(eeee) The 0% rate applies if the beneficial owner of the dividends is a company that directly controls at least 20% of the capital of the distributing company.
(ffff) The 5% applies if the beneficial owner of the dividends is a company that directly controls at least 25% of the capital of the distributing company, such stake being required to be held during the previous year before the dividend distribution takes place in the case of South Africa. The 10% rate applies in all other cases.
(gggg) The 3% rate applies to copyright royalties with respect to (journalistic) news. The 5% rate applies to copyright royalties received by the author or his or her heirs with respect to literary, theater, musical or artistic works. The 10% rate applies to royalties relating to patents, designs or models, computer software, know-how and technical assistance. The 15% rate applies in all other cases.
(hhhh) The 0% rate applies if the dividends paid to a company the capital of which is wholly or partly divided into shares and that directly controls at least 10% of the capital of the distributing company during the year