Skip to content
Back to index
V1612-14 23 June 2014 · SG de Fiscalidad Internacional Criterion in force
IRNR · exención

No retention of dividends to a German parent company if exemption conditions met

A Spanish company asked whether it could apply the exemption under article 14.1.h) of the TRLIRNR to avoid withholding on dividends paid to its German parent. The DGT responds that, if legal conditions are met, retention does not apply and residence must be proven with a certificate from the German tax authority.

The question raised

For the purposes of not applying withholding tax, through the application of the exemption regulated in Article 14.1.h) of the TRLIRNR, the applicant asks:

The DGT's ruling

As the requirements of Article 14.1.h) of the TRLIRNR are met, it is not appropriate to apply a withholding tax or payment on account for the distribution of profits to the parent company resident in Germany. To apply the exemption under domestic regulations based on residence, justification must be provided by means of a certificate of residence issued by the tax authorities of the country of residence. If an exemption under a treaty were to be invoked, a certificate of tax residence within the meaning of the Treaty itself would be required.

Free assessment and quote