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V3405-20 24 November 2020 · SG de Fiscalidad Internacional Criterion in force
IRPF · dividendos

Withholding tax in Qatar on dividends paid to a Spanish resident shall not exceed 5%

A tax resident in Spain holding a 24.50% stake in a Qatari company seeks clarification on the applicable withholding tax for dividends. The DGT states that, under the Double Taxation Convention, withholding in Qatar cannot exceed 5%, unless the company is listed on a stock exchange.

The question raised

Applicable withholding tax percentage on dividends received.

The DGT's ruling

According to the Spain-Qatar Convention, dividends paid by a company resident in Qatar to a resident in Spain may be taxed in Qatar, but the tax may not exceed 5 percent. However, if the paying company is listed substantially and regularly on a stock exchange and the beneficiary holds at least 1 percent, the dividends shall only be taxed in Spain. Spain shall eliminate double taxation in accordance with its domestic legislation.

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