Spain Supreme Court Clarifies Withholding Tax on Dividends Under DTA, Protocol With Germany

The Spanish Supreme Court April 25 issued Decision No. 514/2023, clarifying the imposition of the withholding tax on dividends paid to a German alternative investment funds group company under the 2011 DTA and protocol with Germany. A Spanish-listed company paid dividends on German hedge funds to the taxpayer, a German group company, subject to a withholding tax rate of 15 percent under the DTA. The taxpayer sought a partial refund of taxes withheld, claiming that failure to apply the reduced 1 percent corporate tax rate applicable to Spanish hedge funds was contrary to the Treaty on the Functioning of the ...