.svg){kind=small}
Withholding tax in Spain is a tax deducted at source by the paying entity (a company, bank, or employer) before transferring income to the recipient. For non-residents, this is governed by Spain’s Non-Resident Income Tax law (Impuesto sobre la Renta de No Residentes — IRNR), regulated under Royal Legislative Decree 5/2004.
Unlike resident taxpayers, non-residents generally do not file a full Spanish tax return for each income type. Instead, the withholding tax is the final tax — unless you actively apply for a refund based on a treaty or EU law.
Standard withholding tax rates in Spain for non-residents
The default withholding tax rates under Spanish domestic law (without treaty relief) are:
- Dividends: 19%
- Interest: 19%
- Royalties: 24%
- Rental income from Spanish property: 24% (19% for EU/EEA residents)
- Capital gains from the sale of Spanish property or shares: 19%
- Employment income (no permanent establishment): 24% general rate; 47% above €600,000
- Pensions: progressive rates from 8% to 40%
How double taxation treaties reduce withholding tax in Spain
Spain’s extensive network of over 100 tax treaties means that in many cases the applicable withholding rate is much lower than the domestic rate. Treaty rates must be specifically claimed — they are not applied automatically by the paying entity unless the taxpayer provides the required documentation.
Treaty rates for dividends (examples)
- Spain–US treaty: 15% general; 10% for parent companies with 10%+ shareholding
- Spain–UK treaty: 15% general; 10% for 10%+ shareholding
- Spain–Germany treaty: 15% general; 5% for corporate shareholders with 10%+
- Spain–Netherlands treaty: 15% general; 5% for qualifying companies
Treaty rates for interest (examples)
- Spain–US: 10%
- Spain–UK: 12%
- Spain–Germany: 10%
EU exemptions (Parent-Subsidiary Directive)
Under the EU Parent-Subsidiary Directive, dividends paid by a Spanish subsidiary to an EU parent company that holds at least 5% of shares for at least 1 year may be exempt from Spanish withholding tax entirely. Similarly, the EU Interest and Royalties Directive can eliminate withholding on those payments between EU group companies.
How to apply for treaty-reduced withholding tax in Spain
To benefit from a reduced treaty rate, the non-resident recipient must generally:
- Provide a valid certificate of tax residence issued by their home country’s tax authority
- Submit the relevant Spanish form before payment is made (in most cases, the paying entity applies the reduced rate directly)
- In some cases, claim a refund via Modelo 210 if withholding was applied at the domestic rate
Withholding tax on Spanish real estate for non-residents
Rental income from Spanish property is one of the most common situations where non-residents face Spanish withholding tax. Key points:
- EU/EEA residents pay 19% and can deduct property-related expenses
- Non-EU residents pay 24% with no expense deductions allowed
- Quarterly returns must be filed using Modelo 210
- When you sell Spanish property as a non-resident, the buyer is legally required to withhold 3% of the purchase price and pay it to the tax authorities on your behalf
Frequently asked questions
What is Modelo 210?
Modelo 210 is the Spanish tax form used by non-residents to declare and pay IRNR (non-resident income tax). It is used for rental income, capital gains, imputed income on vacant properties, and to claim refunds when excess withholding has been applied.
Can I recover excess withholding tax paid in Spain?
Yes. If Spain withheld tax at the domestic rate but you are entitled to a lower rate under a tax treaty, you can file a refund claim using Modelo 210. There are specific deadlines — generally 4 years from the date of withholding — so acting quickly is important.
Do I have to file a Spanish tax return if I only earn rental income in Spain?
Yes, if you rent out Spanish property you must file quarterly IRNR returns using Modelo 210 — even if no net profit is made. There is no minimum threshold for non-residents.
Getting withholding tax right in Spain requires knowing both domestic law and the applicable treaty rules. At Capital Auditors & Consultants, we help non-residents minimize their Spanish tax liability legally and efficiently. Reach out to our international tax team for a personalized review.
