How are UK dividends taxed in Spain?

[vickyw28]

Hi

Im looking for clarification on how UK dividends are taxed in Spain, I have read numerous answers online all of which seem to be differnent in some way.

In the UK it works as follows

Profit from LTD company £50,000
Minus corporation tax @ 21% = £10,500
Left £39,500 this is the amount of Dividend you can complete once you have paid the 10% which is credited back on the first £32,010. Above £32,010 you are charged 32.5% minus the 10% credited back on the remaining £7,000

Using the above scenario can you complete what tax is actually payable in Spain on £50,000 profit.

[doreen]

Vicky, you really need to visit a professional to get an answer to this ... I seem to recall there being some issue about whether you were "connected" to the company paying the dividend, and if yes, it could be treated as income and taxed accordingly ???

[PaulAdvisor]

vICKY...Dividends are taxable, wherever they arise, as investment income (Rendimientos de Capital Mobiliário), which are subject to Spanish tax as savings income at 21%, 25% and 27%. Spanish residents will be entitled to an exemption of €1,500 per annum against dividend income under most circumstances.


A resident of Spain who receives dividends from a company resident in the UK is entitled to the same tax credit that an individual resident in the United Kingdom would be – i.e. 10%. This is the case unless the shareholder is a company which controls directly or indirectly at least 10% of the voting power in the UK company. In this case no 10% tax credit is given but the dividend is deemed to have borne UK tax of an amount equal to 15/85ths of that dividend.

IMPORTANTLY - This tax credit can be offset against the Spanish tax liability on the dividend income. The taxable dividend in Spain would be the net dividend received plus the 10% tax credit treated as being attached to the dividend Thus, in Spain, a further 11% will be due in respect of UK dividend income.




- - - - - - - - - - merged double post - - - - - - - - - -

Vicky...Dividends are taxable, wherever they arise, as investment income (Rendimientos de Capital Mobiliário), which are subject to Spanish tax as savings income at 21%, 25% and 27%. Spanish residents will be entitled to an exemption of €1,500 per annum against dividend income under most circumstances.


A resident of Spain who receives dividends from a company resident in the UK is entitled to the same tax credit that an individual resident in the United Kingdom would be – i.e. 10%. This is the case unless the shareholder is a company which controls directly or indirectly at least 10% of the voting power in the UK company. In this case no 10% tax credit is given but the dividend is deemed to have borne UK tax of an amount equal to 15/85ths of that dividend.

IMPORTANTLY - This tax credit can be offset against the Spanish tax liability on the dividend income. The taxable dividend in Spain would be the net dividend received plus the 10% tax credit treated as being attached to the dividend Thus, in Spain, a further 11% will be due in respect of UK dividend income.




- - - - - - - - - - merged double post - - - - - - - - - -

Sent the post twice, apologies - all new to me!