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.

 

[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%.‌

 

[samarkand]

just 50% shareholder, not a director

perfect - that's what I had understood from the DTA but was︂ not 100% sure

From a Cyprus perspective things seems clear -︅ Spain is my main concern.

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

Apologies for my ignorance

 

[MiddleEuroAsia]

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

Good luck!