Foreign dividends: Spanish tax plus tax already withheld abroad

Key rules

• Credit cap: You get the lower of the foreign tax paid and the Spanish tax on that income, worked out per country and income type.
• Treaty rate: For dividends, only foreign tax up to the treaty rate counts for the Spanish credit.
• Excess withholding: Foreign tax above the treaty rate is reclaimed from the source country, not from Spain.
• Unused credit: Foreign tax left unused because of the cap can be carried over for the following four years.

The short version

If you are a Spanish tax resident, you pay Spanish tax on dividends from abroad. Tax already withheld in the source country is not lost: you get a credit for it in your Spanish return. The credit is capped, so you may still need to reclaim some foreign tax from the other country.

How the credit works

You deduct the lower of two amounts:

• the tax you actually paid abroad on the dividend, or
• the Spanish tax that corresponds to that same foreign income.

The cap is worked out separately for each country and each type of income. For dividends, the foreign tax that counts is limited to the treaty rate between Spain and the source country.

Example with round numbers: a foreign dividend of 1,000 has 30 withheld abroad, and the treaty rate is 15%. Only 150 of foreign tax can count towards your Spanish credit, and only if Spanish tax on that dividend is at least that much. Anything withheld above the treaty rate must be reclaimed abroad.

If the cap leaves foreign tax unused

If the Spanish cap is lower than the foreign tax that qualifies, the unused part can be carried over. You can use it in the following four years.

Find the treaty rate for your country

Spain's tax treaties are listed by the tax agency and the Ministry of Finance, in the section on conventions to avoid double taxation. The full text of each treaty is published in the official state gazette (BOE). The dividends clause is usually the tenth in the treaty. The source country's tax authority also publishes its rates.

Reclaim withholding above the treaty rate

You cannot use the excess as a Spanish credit. Claim it back from the tax authority of the country that withheld it.

• Use that country's own refund form.
• Attach your Spanish residence certificate and proof of the dividend and the tax withheld.
• Deadlines vary by country, commonly two to four years from the payment. Check the country's deadline early.
• Some brokers offer a reclaim service for a fee.

The documents list and timeline below cover the paperwork and order. To estimate your Spanish tax, use the calculator below.

Timeline and deadlines

• Get proof of the dividend and the tax withheld from your broker: after the dividend is paid

• Send the refund claim for the excess withholding to the source country's tax authority: commonly within two to four years of the payment

Documents you need

• The refund form of the country that withheld the tax, issued by its tax authority.

• Your Spanish residence certificate, issued by the Spanish tax agency.

• Proof of the dividend and of the tax withheld, such as a certificate from your broker.

What if foreign dividend withholding exceeds the treaty rate?

Spain credits only the amount of foreign tax that the tax treaty allows. If the source country withheld more than the treaty rate, you must reclaim the excess from that country's tax authority. You cannot claim it as the Spanish foreign tax credit.

How to reclaim the excess

Ask the tax authority of the country that withheld the tax. Spain will not refund it and will not credit it on your Spanish return.

You will usually need:

• the refund form of the source country
• a certificate of tax residence in Spain
• proof of the dividend and of the tax withheld, such as a certificate from your broker

You request the residence certificate from the Spanish tax agency (the Agencia Tributaria), either online with a digital certificate or at an office. It is issued for a specific country and year, so ask for the right ones.

Watch the deadline

Each country sets its own claim deadline. Two to four years from the payment is common, but check the country in question. Start early, because refunds can take a while and the paperwork is easier to gather while the broker's records are recent.

Ways to avoid the problem

Many brokers apply the reduced treaty rate at source if they receive the right forms in time, such as the W-8BEN for US shares. Forms differ by country and by broker, so ask your broker which ones it needs. Some brokers also offer a paid reclaim service if you would rather not deal with a foreign tax authority yourself.

Estimate Spanish tax on your dividends, interest and gains

Work it out

What you enter

• Foreign dividends received this year, before any tax withheld (EUR): Your broker's annual dividend statement or tax certificate.
• Treaty rate for dividends from that country (%): Your broker or the source country's tax authority; it is the reduced rate under the Spain treaty.
• Other interest and Spanish dividends this year (EUR): Your bank and broker annual tax statements.
• Total gains from selling investments this year (EUR): Your broker's annual sales report, using oldest shares sold first.

Figures used

• Top of the first bracket: 6,000 EUR (as of 2025)
• Top of the second bracket: 50,000 EUR (as of 2025)
• Top of the third bracket: 200,000 EUR (as of 2025)
• Top of the fourth bracket: 300,000 EUR (as of 2025)
• Rate up to 6,000: 0.19 ratio (as of 2025)
• Rate from 6,000 to 50,000: 0.21 ratio (as of 2025)
• Rate from 50,000 to 200,000: 0.23 ratio (as of 2025)
• Rate from 200,000 to 300,000: 0.27 ratio (as of 2025)
• Rate above 300,000: 0.3 ratio (as of 2025)
• Share of income that gain losses can offset: 0.25 ratio (as of 2025)

Worked example (with Foreign dividends received this year, before any tax withheld 3,000 EUR, Tax withheld abroad on those dividends 600 EUR, Treaty rate for dividends from that country 15 %, Other interest and Spanish dividends this year 1,000 EUR, Total gains from selling investments this year 2,000 EUR, Total losses from selling investments this year 500 EUR)

When the sum misleads

• If you have dividends from several countries, run the sum once per country: the credit limit is worked out per country.
• The Spanish tax on foreign dividends is estimated as a share of your total tax, so your tax software may differ slightly.
• Losses carried over from earlier years and sales caught by the two-month rule are not included; add or remove them before you enter your figures.
• Gains and losses should be worked out selling the oldest shares first.

Frequently asked questions

Where can I find the treaty dividend rate for my source country?

You can find the treaty dividend rate for a country in the section on tax conventions (convenios para evitar la doble imposición) on the Spanish tax agency and Ministry of Finance websites. The dividend clause of each treaty holds the rate.

Can I claim the foreign withholding above the treaty rate as a Spanish credit?

No, the part of the foreign withholding above the treaty rate cannot be claimed as a Spanish credit.

What happens if the cap leaves some foreign tax unused?

Yes, you can use the unused foreign tax later, because it carries over to the following four years. The credit is limited per country and per type of income, so the leftover can only offset Spanish tax on that same income.

How long do I have to reclaim excess foreign withholding?

The deadline to reclaim excess foreign withholding is commonly two to four years from the payment, but it varies by country. Ask the source country's tax authority or your broker for the exact deadline before you file.