Spain: Refund of WHT - Breach of the EU principle of free movement of capital in the dividend regime for non-residents with losses

In February 2026, the United States introduced a series of significant and fast‑moving measures that alter the trade environment for all exporters shipping goods into the country.

The Spanish Supreme Court has extended the Wealth Tax cap to non-residents, ensuring equal tax treatment for both residents and non-residents with assets in Spain.

The upcoming judgement of the CJEU is likely to have significant implications for portfolio investments of U.S. investment funds in Spain and in further EU markets. The decision should impact mutual funds from other third (non-EU) country jurisdictions, too.

News on tax developments affecting the international Financial Services industry.

The CJEU judgement of 19 December 2024 has important implications for foreign companies investing in Spain that incur losses in their country of residence and that cannot recover the WHT on the income derived from their investments in Spain.

Spanish Act 18/2022 of September 28 on company creation and growth introduces a range of new measures including the e-invoice, which is mandatory for all exchanges between businesses and professionals.

The Supreme Court declares the existence of discrimination in the taxation of non-resident hedge funds when receiving dividends from Spanish companies

The Spanish Government has approved several tax measures which have come into force in 2023.

In July 2021, Law 11/2021 of 9 July was published in Spain, on measures to prevent and combat tax fraud.

The Spanish government has recently published the draft State General Budget for 2023 which includes several relevant tax modifications. 

The General State Budget of Spain that entered into force as of 1 January 2021 includes new relevant tax measures, especially with regard to Corporate Income Tax.

On 24 February 2021, the Supreme Court ruled on the right to refund WHT levied on Spanish dividends obtained by foreign sovereign wealth funds (appeal no. 3829/2019).

Positive side-effects of data collection by the fiscal authorities can be seen in Spain providing pre-completed tax returns.

On 5 March 2021, the Court of Justice of the European Union (CJEU) ruled that the right conferred on four Spanish professional football clubs to continue to operate as non-profit entities and benefit from the reduced tax rate associated with that status constituted an illegal State aid.

Our colleague from ARCO reports on two recent decisions of the Spanish Central Economic Administrative Court on the concept of beneficial ownership.

The recent ECJ decision of March 3rd, 2021 (case C-220/19, Promociones Oliva Park, S.L.) brings to an end the long-lasting controversy on the compatibility with EU Law of the Tax on the Value of Electricity Generation.

In Spain, the settlement of tax disputes in the European Union has been implemented into Spanish domestic law.

Following our previous updates on the Spanish Digital Services Tax, the Spanish Digital Service Tax (“DST”) Act was finally published in the Spanish Official State Gazette (Boletín Oficial del Estado) on 16 October 2020 and will come into force on 16 January 2021.