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V2782-14 15 October 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · dividendos

Brazilian dividends exempt in Spain with progressive exemption; capital gains taxed in both countries

A Spanish resident asks how Brazilian dividends and capital gains from share sales are taxed. The DGT clarifies that dividends are exempt in Spain under a progressive exemption method, while capital gains may be taxed in both countries.

The question raised

Whether the dividends and capital gains obtained by the taxpayer are subject to exclusive taxation in Brazil or in Spain, or are taxed in both countries.

The DGT's ruling

Dividends from Brazilian companies are exempt in Spain pursuant to the Convention, applying the exemption method with progression. Gains from the disposal of equity interests may be subject to taxation in both Brazil and Spain. In the latter case, Spain must eliminate double taxation through the deduction method in accordance with the Convention and domestic regulations.

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