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Where Taxpayers and Advisers Meet

Spanish withholding tax on dividends for UK corporate investor

Peter Zalkind
Joined:Sat Jun 24, 2023 7:59 pm
Spanish withholding tax on dividends for UK corporate investor

Postby Peter Zalkind » Thu Nov 23, 2023 7:23 pm

I hope someone can answer this.

I have a UK company that has previously received dividend income from a listed company share investment domiciled in Cyprus. The dividend income is excluded income in the hands of my UK company, and not subject to withholding tax in Cyprus.

Said listed company is now proposing to redomicile to Spain, where there is 19% withholding tax on dividends paid. There is a double taxation treaty between UK and Spain and the dividend income should also be excluded income for the UK company.

My question is whether my UK company can credit this 19% withholding tax from future Spanish investment dividends received, against other types of taxable income (parallel income) subject to CT that my UK company may have in the same year (as my UK company will not have any other type of dividend income, but shall have other forms of taxable income during the year)?

Hope this makes sense.



Joined:Sat Feb 01, 2014 3:26 pm

Re: Spanish withholding tax on dividends for UK corporate investor

Postby bd6759 » Sat Nov 25, 2023 12:41 pm

Credit for foreign tax is set against UK tax on that same income. If the underlying income is not assessable you cannot claim the foreign tax. That is the principle of double taxation: there has to be double taxation.

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