Dividends And Other Income Derived From Equity

Double taxation treaties follow a shared taxation regime regarding dividends, meaning that they can be taxed both in the state of residence of the recipient and in the state from which the dividends originate, though in this case, with a limit that is generally set at 15%.

Therefore, when a resident of a state that has a treaty with Spain receives dividends from a Spanish entity, they can be taxed in Spain, with the limit established in the treaty (generally 15%).

Dividends in OECD Convention Model

Article 10 of the OECD Model Tax Convention establishes shared taxation between the source State and the residence State of the recipient, with a limit on the source State (Article 10.1):

• 5% if the beneficial owner is a company (under the wording prior to the 2017 OECD Model Tax Convention, partnerships were excluded, but now the treatment given by the relevant Double Taxation Agreement to partnerships must be considered in accordance with Article 1) that directly holds at least 25% of the capital.
• 15% in all other cases.

Dividens in IRNR, Spanish Legislation

They are considered to be obtained in Spain when they originate from shares in the equity of entities resident in Spain: Article 13.1(f) Non-Resident Income Tax Law (IRNR), Royal Legislative Decree 5/2004.

Tax rate: 19%