When you receive dividends for having sharesyou won’t have all the money. Before reaching your accounta withholding tax is applied to personal income tax. That is, it is an advance that the Treasury collects in advance and which is then regularized in the tax return.
In other words, The IRS is withholding money from you so that the collection of your dividends does not remain tax-free. However, when you file your tax return, the bills are paid and you may have to pay some money back too. In this article we explain everything to you.
How much are dividends paid in Spain?
Dividend withholding tax in Spain is 19%. However, dividends are taxed in taxable base of savings and as income from movable property and in the annual tax return of natural persons the following sections apply:
| Dividends of the 2025 personal income tax tranches | Applicable type |
| The first 6,000 euros | 19% |
| From €6,000 to €50,000 | 21% |
| From €50,000 to €200,000 | 23% |
| From €200,000 to €300,000 | 27% |
| More than 300,000 euros | 30% |
In this way the withholding tax in the distribution of dividends is eliminated is adjusted with these rates when submitting the tax return.
If, for example, you have received 10,000 euros in dividends and 19% has already been withheld, on anything exceeding 6,000 euros the Treasury will claim the difference up to 21% (the first 6,000 euros are taxed at 19% and the remaining 4,000 at 21%).
Furthermore, there is also the possibility of offsetting profits and losses. That is, if in the same year you had losses on the stock market, you can offset them with what you earned with these dividends. This compensation goes up to 25%.
For example, if you earn 4,000 euros in dividends and lose 2,000 euros selling shares, you will only pay taxes on 2,000 euros.
When are withholding taxes entered into the Treasury?
Withholding taxes on dividends They are not paid directly by the shareholder to the Treasurybut it is the company that distributes the dividends (or the financial intermediary) that applies the corresponding withholding tax and pays it quarterly to the Treasury using form 123.
Subsequently, the company presents an annual summary (form 193) showing all the payments made to each member, including withholdings. This information also reaches the Revenue Agency and automatically appears in your tax data when you file your tax return.
In other words, you don’t need to enter anything manually. Your broker will already pay you the dividends with the corresponding discounted withholding tax.
This dividend withholding tax is then reflected in your tax information at the time of filing. All you have to do is confirm the correspondence of the data at the time of declaration.
In short, The timing of the withholding tax payment depends on the date on which the dividend is payableor when the member already has the right to collect it.
What dividend withholding taxes do we apply in the distribution of profits?
This is where it all gets a little tricky. Depending on your situation and the source of the dividend, retention varies:
Natural person resident in Spain:
- Withholding tax of 19% at origin (Spain).
- It is regularized in the tax return of natural persons.
Non-resident natural person:
- Fixed withholding tax of 19% in Spain (may be different if there is a tax agreement between the two countries for double taxation).
- You do not file the declaration in Spain if you are not a tax resident (you are taxed according to the rules of your country).
Company resident in the EU:
- Possibility of exemption from the Parent-Subsidiary Directive if the requirements (minimum ownership and seniority) are met.
Non-resident company:
- Standard withholding of 19% (may vary according to agreements).
- Need to justify residence using specific forms.
For example:
If a Spanish resident receives dividends from a US company, 15% will be withheld there (as a general rule).
Furthermore, in Spain a rate of 19% is applied. However, you can claim that 15% as a double tax deduction.
In these cases it is useful to present the W-8BEN form, which allows you to reduce the withholding tax by applying the tax convention between the United States and Spain.
The key to not paying taxes twice on the same dividend is: make good use of the double taxation agreements signed by Spain with many countries.
Generally, You can deduct the tax paid abroad in Spainwith minimum limit between:
- The tax paid outside.
- The tax you would have to pay in Spain for the same income.
Yes, indeed, you will need proof of foreign withholding. In many cases, international brokers provide them in their annual tax returns.
Summary of withholdings according to the origin of the dividend
Below, we show you a summary table why Dividend withholding taxes are a complex issue.with many nuances.
| Type of shareholder | Origin of the dividend | Deemed applicable |
| Resident natural person | Spain | 19% |
| Resident natural person | United States (double tax treaty country) | 15% in the United States + 19% in Spain. With the possibility of requesting the refund of the withholding tax in the country of origin. |
| Non-resident natural person | Spain | 19% (unless agreed) |
| Company resident in the EU | Another EU country | Possibility of exemption if the requirements are met. |
| Non-resident company | 19% or as agreed. |
