We advise non-resident investors, investment funds, family offices and institutional investors on the recovery of withholding taxes borne on dividends distributed by Spanish companies, both where the withholding exceeds the limit established under the applicable Double Tax Treaty (DTT) and where there may be a difference in treatment contrary to European Union law.
General withholding tax rate applicable to dividends paid to non-residents.
Stages in the recovery process.
Of the excess taxation may be recoverable.
What is it?
Non-resident investors who have borne taxation in Spain on dividends in excess of the amount properly due may, where applicable, request a refund of the excess.
This situation may arise, among other circumstances, where the withholding tax applied in Spain exceeds the limit provided for under the applicable Double Tax Treaty or, in the case of certain foreign investment funds, where the tax treatment applied in Spain is less favourable than that applicable to a comparable Spanish collective investment undertaking.
Determining whether a refund is available, and the amount that may potentially be recovered, requires an analysis of the investor’s tax residence, the applicable DTT, its legal nature and tax regime, the characteristics of the investment and the specific circumstances of each case.
General withholding tax rate applicable to dividends paid to non-residents under the Spanish Non-Resident Income Tax rules
Double Tax Treaties may limit the rate of taxation that Spain may apply to dividends obtained by investors resident in the other contracting State.
In certain circumstances, a difference in the taxation of resident and non-resident investment funds may be contrary to the free movement of capital protected under European Union law.
Why does it matter?
The recovery of excess withholding tax may have a significant financial impact, particularly for institutional investors, investment funds, family offices and high-net-worth individuals receiving regular dividend income from Spanish companies.
The analysis should take into account, among other matters:
Foreign investment funds
The recovery of withholding tax on dividends is not limited to cases in which Spain has applied a withholding tax rate exceeding the rate provided for under a Double Tax Treaty.
The judgment of the Court of Justice of the European Union of 17 September 2026, delivered in Case C-139/25 (iShares Europe ETF), considers the different tax treatment applied to dividends obtained from Spanish companies by resident and non-resident collective investment undertakings.
In the case examined, a US investment fund had been subject in Spain to a 15% tax on dividends received, in accordance with the DTT between Spain and the United States, whereas comparable Spanish collective investment undertakings were taxed at 1%.
The CJEU confirms that subjecting dividends received by a non-resident collective investment undertaking to a higher tax burden than that borne by a resident undertaking may constitute a restriction on the free movement of capital.
The existence of a Double Tax Treaty does not, in itself, mean that a potential difference in treatment has been neutralised.
It is necessary to determine whether the mechanisms provided for under the DTT effectively and fully compensated for the difference in taxation borne in Spain.
Where an investment structure is subject to a tax transparency regime, this analysis may require consideration not only of the position of the fund itself, but also of whether its investors were able to make effective use of the corresponding tax credit.
Accordingly, each claim requires an analysis of the characteristics of the fund, its comparability with a Spanish collective investment undertaking, the applicable tax regime in its State of residence, the relevant DTT and the effective use of the mechanisms intended to eliminate double taxation.
Differences in the process
The refund process may vary depending on whether the investor holds the investment directly or through one or more financial intermediaries.
Documentation: evidence must be provided of the dividends received, the withholding tax borne and the investor’s tax residence.
Claim: the refund request is submitted to the Spanish Tax Agency together with the documentation supporting the entitlement to the refund.
Claim: the request is likewise submitted to the Spanish Tax Agency together with the corresponding supporting documentation.
How to request a refund of withholding tax on dividends in Spain
We determine the tax actually borne and compare it with the amount that would apply under the relevant DTA and applicable legislation.
In the case of foreign investment funds, we also analyse their comparability with a Spanish collective investment undertaking and whether there may be a difference in treatment contrary to European Union law.
We collect the tax residence certificate, withholding tax certificates and the documentation required to evidence the investment and the dividends received.
Where a foreign fund is involved, the analysis may also include regulatory, tax and corporate documentation relating to the fund and, where relevant, information on the tax regime applicable to its investors.
We prepare the corresponding refund claim before the Spanish Tax Agency, including, where applicable, the filing of Form 210 and the supporting documentation evidencing the entitlement to the refund.
We monitor the proceedings before the Spanish Tax Agency and, where applicable, respond to any requests for additional information or documentation.
Where necessary, we also analyse the possible appeal options available against an unfavourable decision.
If the claim is upheld, the refund is made by bank transfer in accordance with the rules applicable to the relevant procedure.
Practical examples
Receives €10,000 in dividends from a Spanish company.
Spain applies a withholding tax of 19%. In the case considered, the Spain–United States DTA sets a maximum rate of 15%.
| Concept | Amount |
|---|---|
| Withholding tax applied (19%) | €1,900 |
| Maximum withholding tax under the DTA (15%) | €1,500 |
| Potentially recoverable amount | €400 |
Receives €15,000 in dividends from a Spanish company.
Spain applies a withholding tax of 19%. If the applicable DTA sets, for the specific case considered, a maximum rate of 10%:
| Concept | Amount |
|---|---|
| Withholding tax applied (19%) | €2,850 |
| Maximum withholding tax under the DTA (10%) | €1,500 |
| Potentially recoverable amount | €1,350 |
A foreign investment fund comparable to a Spanish collective investment undertaking receives €1,000,000 in dividends from Spanish companies and bears taxation at a rate of 15%.
If a comparable Spanish collective investment undertaking is taxed at 1% on those same dividends:
| Concept | Amount |
|---|---|
| Tax borne (15%) | €150,000 |
| Reference taxation of a comparable Spanish collective investment undertaking (1%) | €10,000 |
| Difference in taxation | €140,000 |
The existence of this difference does not automatically give rise to an entitlement to a €140,000 refund. It will be necessary to analyse the comparability of the fund, the applicable DTA and whether the difference in taxation was effectively neutralised through the tax mechanisms applicable in the State of residence.
* Examples are provided for illustrative purposes only. The taxation and amount potentially recoverable will depend on the applicable legislation, the relevant DTT, the nature of the investor and the specific circumstances of each case.
Why Seegman
If you believe that you have borne excessive taxation on dividends received from Spanish companies, our Tax team can analyse the different routes available to seek recovery.
We review the applicable DTT, Spanish legislation and, where relevant, European Union law in order to determine the existence and potential scope of a claim.
We analyse the legal and tax structure of the fund, its comparability with Spanish collective investment undertakings and the double taxation relief mechanisms applicable in its State of residence.
We manage the documentation required to evidence the withholding tax borne and, where necessary, coordinate the collection of certificates from custodians and financial intermediaries.
We prepare and file the refund request, respond to requests from the tax authorities and monitor the proceedings through to resolution.
Learn about the main aspects of the process for recovering withholding tax on dividends, the distinction between direct investments and investments held through custodians, and the documentation generally required to request a refund.
Frequently asked questions
There are different scenarios.
One of the most common arises where the withholding tax rate applied in Spain exceeds the limit established under the Double Tax Treaty between Spain and the investor’s country of residence.
In the case of certain foreign investment funds, excessive taxation may also arise where dividends sourced in Spain have borne a higher tax burden than that applicable to a comparable Spanish collective investment undertaking.
Each situation must be assessed individually.
Potentially, yes.
Correct application of the percentage provided for under a DTT does not, in itself, exclude the possibility that there may be a difference in treatment compared with a comparable Spanish collective investment undertaking.
The CJEU judgment of 17 September 2026 in Case C-139/25 (iShares Europe ETF) establishes that it is necessary to determine whether that difference in taxation has been effectively and fully neutralised through application of the treaty.
The CJEU confirms that subjecting dividends received by a non-resident collective investment undertaking to a higher tax burden than that borne by a resident collective investment undertaking may constitute a restriction on the free movement of capital.
It also establishes that the existence of a DTT is not, in itself, sufficient to conclude that the difference in treatment has been eliminated. It is necessary to determine whether the mechanisms provided for under the treaty effectively compensated for the difference in taxation.
Where the fund itself is not taxed directly on the dividends and instead passes the income and corresponding tax credits through to its investors, it may be necessary to determine whether those investors were able to make effective use of the relevant tax credit.
For a DTT to neutralise the difference in treatment, the available relief must allow the relevant difference in taxation to be fully eliminated.
Not automatically.
It is necessary to analyse, among other matters, whether the foreign fund is in a comparable situation to a Spanish collective investment undertaking qualifying for the 1% rate, the tax regime applicable to the fund, the relevant DTT and whether the difference in treatment was neutralised in the State of residence.
For claims based on a DTT, the main requirements are evidence of tax residence, the dividends received and the withholding tax borne.
In the case of investment funds, additional documents may be required concerning their incorporation, regulatory status, supervision, tax regime, investor characteristics and any other elements necessary to establish comparability and the effective tax treatment of the dividends.
The involvement of custodians or intermediaries may increase the documentation required. In particular, withholding tax certificates may need to be obtained and the payment flow from the Spanish company to the ultimate beneficial owner may need to be evidenced.
It is intended for non-resident investors receiving dividends from Spanish companies who have borne taxation exceeding the amount properly due.
It is particularly relevant for institutional investors, investment funds, asset managers, family offices and high-net-worth individuals with recurring investments in Spanish companies.
As a general rule, refund requests using Form 210 that result in a refund may be submitted from 1 February of the year following the accrual date and within the four-year period established for requesting the refund.
However, the calculation of this period and any actions that may affect it must be assessed on a case-by-case basis, particularly where there have been prior administrative or judicial proceedings.
Tell us about your situation. Our team will analyse the withholding tax applied, the relevant Double Taxation Treaty and, where applicable, the potential application of European Union law to determine the available options for recovering any excess tax paid in Spain.
This content is for advertising and general informational purposes only. For professional legal advisory services, please contact the firm directly through the designated specialist contacts. Seegman refers to Seegman Servicios Jurídicos, S.L.P., NIF B88144852.
