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V1538-14 11 June 2014 · SG de Fiscalidad Internacional Criterion in force
IRPF · dividendos

Dividend retention in Portugal can be deducted in Spain to avoid double taxation

A Spanish resident asks whether the Portuguese dividend withholdings are correctly applied. The DGT confirms that retention in Portugal cannot exceed 15% under the double taxation treaty, and this amount is deductible in Spain to avoid double taxation.

The question raised

Whether the withholdings applied are correct.

The DGT's ruling

The Convention between Spain and Portugal limits taxation in the source State to 15% of gross dividends. The resident in Spain may deduct from their Personal Income Tax (IRPF) the amount effectively paid in Portugal, without exceeding the portion of the tax corresponding to those incomes. Likewise, the 21% withholding applied in Spain complies with the regulations in force for the periods 2012 to 2014.

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