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V1456-14 2 June 2014 · SG de Fiscalidad Internacional Criterion in force
IRNR · exención

Exemption from interest retention requires official residency certificate

A Luxembourg SICAV asks whether it can avoid Spanish source interest withholding without providing an official residency certificate. The DGT states that without such a certificate, residency cannot be proven, and neither the exemption nor the treaty benefit can be applied.

The question raised

Whether the interest of Spanish source received by the applicant is exempt pursuant to Article 14.1 c) of the TRLIRNR, without the obligation to perform withholding by the Spanish paying entities.

The DGT's ruling

To apply a residence exemption, it is necessary to justify it by means of a certificate of residence issued by the tax authorities of the country of residence. In the absence of this document, residence in Luxembourg cannot be proven to apply the exemption under the TRLIRNR or the Double Taxation Convention. In this case, interest is taxed at a rate of 21% through withholding.

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