Spanish company dividend, Cyprus residency

[samarkand]

I am a 50% shareholder of a private company in Spain yet my tax residency is in Cyprus.

In the event the company pays a dividend, how would this be taxed? I have read the DTT but it is still unclear

 

[Martin Everson]

Under Spain/Cyprus DTA there is no withholding tax applied to dividends paid by a Spanish company to a Cyprus resident.

If you have no connection to Spain then your not Cyprus domiciled but just resident your not taxed.

But get proper tax advice.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[CyprusBusiness]

Are you a director of the Spanish company or just a 50% shareholder?

Being a tax resident of Cyprus you are subject to tax in Cyprus on your worldwide income. Dividend income from Spain is tax exempt in Cyprus. It seems however that under article 10(2) of the DTT between the two States a WHT of 5% at Spain's level will apply. The 0% WHT applies in case the receipient of the dividend is a company and not a physical person. My suggestion is to speak with a Spanish Tax Practitioner.

 

[Martin Everson]

Opps your correct 5% under DTA. I was looking at interest income which is 0%.

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Please note my posts should not be taken as financial or tax advice. Please seek professional advice in that respect.

 

[samarkand]

CyprusBusiness said:
Are you a director of the Spanish company or just a 50% shareholder?

Being a tax resident of Cyprus you are subject to tax in Cyprus on your worldwide income. Dividend income from Spain is tax exempt in Cyprus. It seems however that under article 10(2) of the DTT between the two States a WHT of 5% at Spain's level will apply. The 0% WHT applies in case the receipient of the dividend is a company and not a physical person. My suggestion is to speak with a Spanish Tax Practitioner.
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just 50% shareholder, not a director

Martin Everson said:
Opps your correct 5% under DTA. I was looking at interest income which is 0%.
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perfect - that's what I had understood from the DTA but was not 100% sure

Martin Everson said:
Under Spain/Cyprus DTA there is no withholding tax applied to dividends paid by a Spanish company to a Cyprus resident.

If you have no connection to Spain then your not Cyprus domiciled but just resident your not taxed.

But get proper tax advice.
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From a Cyprus perspective things seems clear - Spain is my main concern.

I gather that what makes sense having mentioned the above is to find a tax advisor in Spain?

Apologies for my ignorance

 

[MiddleEuroAsia]

samarkand said:
I gather that what makes sense having mentioned the above is to find a tax advisor in Spain?

Apologies for my ignorance
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Speak with Allen&Overy OR RocaJunyent, they will get your tax issues sorted out.

Good luck!