Accountancy in Spain

>> Withholding Taxes in Spain

Interest payments

Interest payments are deductible from profits for tax purposes for the payer unless they exceeded the amount of payments which would have been agreed between independent parties.

Moreover, the Treaties to avoid double taxation signed between Spain and the residence country of the payee will have to be taken into consideration when applicable.

The amount of interest that can be deducted is limited to a percentage of the operative income and never can be higher than 1 million euros.

Royalty payments

Payments of royalties are also deductible. Moreover, the rules for associated companies are also applicable when royalties are paid between associated companies.

If the payee is a non-resident, the payment will also be withheld as a general rule at 24.75% of the Spanish non-residents income, but treaties to avoid double taxation include special provisions for royalties and usually establish lower tax rates.

Dividend payments

Dividend payments are not deductible from profits. Dividends paid to a Spanish resident company or individual are subject to a withholding tax, with some exceptions. Dividends paid to non-Spanish resident companies or individuals also must be withheld.

Treaties to avoid double taxation should be consulted, as they usually establish special rules for dividends.

Latest version updated 11th October 2017

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