Spanish investors who receive dividends from Dutch shares may be affected by a withholding tax in both the Netherlands and Spain. This double taxation significantly reduces the returns on your investments. Although Spain has double taxation agreements with many countries, these treaties do not completely eliminate the problem, since they allow taxation both in the country of origin and in the country of residence of the investor.
Double taxation treaties between Spain and the Netherlands limit tax withholding in the country of origin to 15%. However, since the Dutch withholding tax is already 15%, Spanish investors cannot benefit from this limitation. Fortunately, it is possible to request a refund of Dutch withholding tax by following a series of specific steps. Here we detail the process to facilitate the management of these tax obligations and maximize investment returns.
Gather Necessary Information:
- Declaration of all Dutch companies: It is important to have a list of all the Dutch companies in which you have invested, indicating the type of shares and the relevant dates.
- Dividend status: You must keep documentation showing the dividends received and the taxes withheld in the Netherlands.
- Calculation of the market value of shares: A detailed calculation of the market value of all the Dutch shares you owned on January 1 of the year in which the dividends were received is required. This may involve using market prices at the start of the relevant fiscal year.
- Percentage of participation: You must be able to demonstrate the percentage of participation you have in each Dutch company where you hold shares.
- Real estate in Netherlands: If you own real estate in the Netherlands, a declaration of the value of that property and the related debts are required. This is relevant for calculating the total tax burden.
Proving the Higher Tax Burden: This part is crucial. Based on the information collected, you must demonstrate that the total tax burden you have incurred as a Spanish investor is greater than that which a Dutch investor in similar shares would have incurred during the corresponding calendar year. This involves comparing the taxes paid in both countries and justifying why the tax burden is higher in Spain.
Specialized Assistance:
Recovering double tax withholding on dividends may seem like a complex process, but with appropriate guidance and knowledge of specific procedures, Spanish investors can effectively manage their international tax obligations. At Dividend Refund, our goal is to provide clear guidelines and practical resources to facilitate this process, allowing investors to focus on their investment strategies and minimize administrative complications.
With the application of RECOVER from Dividend Refund, Spanish investors can significantly simplify the process of requesting a refund of Dutch withholding tax, saving time and minimizing the associated administrative burden. RECOVER is designed to facilitate the collection of necessary information, ensuring that the required documents are complete and accurate before the application is submitted. This not only improves the efficiency of the process, but also increases the chances of success in recovering withheld taxes in the Netherlands.
For more information on how to maximize your returns and effectively manage your international tax obligations, do not hesitate to contact us. We're here to help you achieve your financial goals with confidence and clarity.
