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V0885-24 23 April 2024 · SG de Fiscalidad Internacional Criterion in force
IRNR · cuenta en participación

Tax treatment of returns from a participating interest account paid to a resident in the United Kingdom

The DGT determines that payments from a participation account constitute interest under the double taxation treaty and are therefore not subject to Spanish taxation.

The DGT's ruling

The income obtained by the non-managing participant in a joint account contract falls within the concept of interest under Article 11.2 of the Convention between Spain and the United Kingdom. As interest, the taxing power corresponds to the State of residence of the beneficiary pursuant to Article 11.1 of the Convention. Accrual occurs when the yields become due or on the date of collection, if the latter is earlier. The Spanish entity shall not apply withholding tax, but must file the corresponding negative declaration.

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