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.




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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.




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