- 1Spain: An attractive country for investment
- 2Setting up a business in Spain
- 3 Tax System
- 4 Investment aid and incentives in Spain
- 5 Labor and social security regulations
- 6 Intellectual property law
- 7Legal framework and tax implications of e-commerce in Spain
- AI Annex I Company and Commercial Law
- AIIAnnex II The Spanish financial system
- AIIIAnnex IIIAccounting and audit issues
- Central government taxes
- Corporate Income Tax
- Personal Income Tax
- Nonresident Income Tax
- Wealth Tax
- Inheritance and Gift Tax
- Spanish Value Added Tax
- Transfer and Stamp Tax
- Excise and Special Taxes
- Custom Duties on Imports
- Tax on Insurance Premiums
- Tax on Financial Transactions
- Tax on certain Digital Services
- Reporting obligations relating to Assets and Rights Abroad
- Special Regimes of certain Autonomous Communities
- Local taxes
- Exhibit I - Corporate income tax incentives for investment
- Exhibit II - Treaty tax rates
- Exhibit III - Practical examples
- Exhibit IV - Case of Application of the Regime for foreign-securities holding companies (ETVE)...
- Exhibit V - Nonresident case study: Income obtained without a permanent establishment
- Exhibit VI - VAT case study
Exhibit IV Case of Application of the Regime for foreign-securities holding companies (ETVE) the shareholders of which are not resident in Spain
The entity, Teleco, S.A. resident in Spain, owns 50% of an entity resident in the US. In turn, Teleco, S.A. is owned by an entity resident in Argentina.
In fiscal year 2022, Teleco, S.A, has received exempt dividends from its US subsidiary. Moreover, in that year, Teleco, S.A. distributes dividends to its Argentinean shareholder in the amount of €1,500,000. The taxation in Spain of these dividends will depend on whether or not the Spanish entity has elected to apply the ETVE regime.
- Teleco, S.A. has elected to apply the ETVE regime
The dividends distributed by the ETVE to its Argentinean shareholder will not be subject to taxation in Spain, in application of the ETVE regime.
- Teleco, S.A. has not elected to apply the ETVE regime
The dividends distributed to the Argentinean shareholder will be subject to taxation in Spain, with the limit established in the Spain-Argentina tax treaty.
In this regard, the tax treaty establishes that the taxation of dividends cannot exceed.
- 10% of the gross dividends if the beneficial owner is a company that directly owns 25% of the capital of the investee that pays the dividends.
- 15% of the gross dividends in the rest of cases.
In our case, as the Argentinean entity owns 100% of Teleco, S.A., the withholding applied will be limited to 10% of the dividends, i.e., the withholdings will amount to €150,000.Taxation in Spain of the dividends distributed by Teleco, S.A. to its shareholder resident in Argentina
|Teleco, S.A. is an ETVE||€0|
|Teleco, S.A. is not an ETVE||€150,000|