Debt securities - rates, eligibility, availability of relief etc. - Spain (securities held in CBF)

30.10.2020

Withholding Tax

Standard rate of withholding tax:

0% / 19%

Holding requirements / restrictions:

Yes

1. Public and private bonds

As of 1 January 2016, the standard rate of withholding tax on Spanish debt securities is 19%. Before that date, the withholding tax rate was 19.5%.

The previous applicable standard withholding tax rates were:

From 1 January 2010 until 31 December 2011

19%

From 1 January 2012 until 31 December 2014

21%

From 1 January 2015 until 11 July 2015

20%

From 12 July 2015 until 31 December 2015

19.5%

Navarra securities:

As of 1 January 2016, the withholding tax rate on interest and dividends paid by companies that are resident in the Navarra Autonomous Region,for example, Viscofan and Papelera Navarra, is 19%. Before that date the withholding tax rates were as follows:

  • 20% between 23 February 2012 and 31 December 2015;
  • 19% between 1 January 2012 and 22 February 2012; and
  • 18% before 1 January 2012.

2. Stripped public debt securities and zero coupon bonds

Payments made by Clearstream Banking on the following securities are exempt from Spanish withholding tax:

  • Stripped public debt securities (with a maturity of less than, equal to or more than 12 months); and
  • Zero coupon bonds with a maturity of less than 12 months.

Holding restriction:

Spanish resident individual tax payers cannot hold with Clearstream Banking Spanish stripped public debt securities (regardless of maturity) and zero coupon corporate debt securities with a maturity of less than 12 months. Reporting requirements:

The identity and holdings of all final beneficial owners that are Spanish resident corporate income tax payers must be disclosed and reported.

Upon receipt of the relevant SWIFT MT564 Corporate Action Notification, customers holding Spanish stripped public debt securities and/or zero coupon bonds must send a List of Spanish Beneficial Owners, containing the information in the specified format.

Further copies of the spreadsheet may be obtained by email to Cadatabase@clearstream.com, with “OCE Spanish strips and zero coupon disclosure” in the Subject line.

Duly completed spreadsheets should be emailed to CA_Bond@clearstream.com with “<respective isin code> / Spanish strips and zero coupon disclosure” in the Subject line to reach Clearstream Banking (Corporate Actions department) at the latest five calendar days after the respective maturity date, by 13:00 CET.

The information included in the final List of Spanish Beneficial Owners provided to Clearstream Banking must be accurate as at close of business (18:00 CET) on the relevant record date (that is, one business day before maturity date).

Important note:

Beneficial owners are responsible for complying with the above disclosure requirements. Failure to comply may be subject to the penalties prescribed by Spanish Tax Law (Ley General Tributaria). Customers holding Spanish stripped public debt securities or zero coupon bonds at maturity are deemed to accept any penalties imposed, directly by the Spanish Authorities or via Clearstream Banking, for failure to comply with the above disclosure requirements.

3. T-Bills

Payments made by Clearstream Banking on Treasury Bills (T-Bills) with a maturity of less than, equal to or more than 12 months are exempt from Spanish withholding tax. Reporting requirements:

The identity and holdings of all final beneficial owners that are Spanish resident corporate income tax payers or Spanish resident individual income tax payers must be disclosed and reported.

Upon receipt of the relevant SWIFT MT564 Corporate Action Notification, customers holding Spanish T-Bills must send a List of Spanish Beneficial Owners, containing the information in the specified format.

Further copies of the spreadsheet may be obtained by email to Cadatabase@clearstream.com, with “OCE Spanish T-Bills Disclosure” in the Subject line.

Duly completed spreadsheets should be emailed to CA_Bond@clearstream.com, with “<respective isin code> / Spanish T-Bills Disclosure” in the Subject line, to reach Clearstream Banking (Corporate Actions department) at the latest five calendar days after the respective maturity date, by 13:00 CET.

The information included in the final List of Spanish Beneficial Owners provided to Clearstream Banking must be accurate as at close of business (18:00 CET) on the relevant record date (that is, one business day before maturity date).

Important note:

Beneficial owners are responsible for complying with the above disclosure requirements. Failure to comply may be subject to the penalties prescribed by Spanish Tax Law (Ley General Tributaria). Customers holding Spanish T-Bills at maturity are deemed to accept any penalties imposed, directly by the Spanish Authorities or via Clearstream Banking, for failure to comply with the above disclosure requirements.

Availability of relief

The availability for tax relief varies according to the Spanish security type, as follows:

1. Domestic bonds subject to RD 1145/2011

Click on the image to view the diagram showing the availability of relief at source and/or reclaim of withholding tax on income from Spanish domestic bonds subject to RD 1145/2011.

Eligible beneficial ownersImmediate refundQuick RefundStandard Refund

All non-residents of Spain

Yes

Yes

No

Supranational organisations recognised by Spanish law

Yes

Yes

No

Spanish resident corporate income tax payers

Yes

Yes

No

Full immediate refund of withholding tax is available only if the appropriate documentation is submitted to Clearstream Banking.

A full quick refund is available if a full immediate refund has not been obtained by a beneficial owner eligible for exemption.

Residents of Spain cannot apply for standard refund of withholding tax through Clearstream Banking.

2. Domestic Bonds not subject to RD 1145/2011

The type of tax relief (full/partial) and beneficial owner eligibility vary according to the issuance date of the security, as follows:

Click on the image to view the diagram showing the availability of relief at source and/or reclaim of withholding tax on income from Spanish domestic Bonds not subject to RD 1145/2011.

  • Corporate bonds issued before 1 January 1999
    • Full immediate refund is available to beneficial owners that are:
      • Residents of an EU member country other than Spain, not resident in a tax haven and not retrieving the income through an intermediary resident in a tax haven;
      • Foreign central banks;
      • Supranational organisations recognised by Spanish law.
    • Partial immediate refund is available to beneficial owners that are residents of countries that have concluded a Double Taxation Treaty (DTT) with Spain.
  • Corporate bonds issued on/after 1 January 1999 traded on the Spanish market in book entry form
    • Full immediate refund is available to beneficial owners that are:
      • Residents of an EU member country other than Spain, not resident in a tax haven and not retrieving the income through an intermediary resident in a tax haven;
      • Spanish resident corporate income tax payers that are not retrieving the income through an intermediary resident in a tax haven;
      • Supranational organisations recognised by Spanish law.
    • Partial relief at source is available to beneficial owners that residents of countries that have concluded a DTT with Spain.
Eligible beneficial ownersImmediate refundQuick RefundStandard Refund

Residents of Double Taxation Treaty countries

Yes

Yes

No

Residents of EU member countries

Yes

Yes

No

Foreign central banks

Yes

Yes

No

Supranational organisations recognised by Spanish law

Yes

Yes

No

Spanish resident corporate income tax payers holding corporate bonds issued after 1 January 1999

Yes

Yes

No

Full/partial immediate refund of withholding tax is available only if the appropriate documentation is submitted to Clearstream Banking.

A full/partial quick refund is available if a full immediate refund has not been obtained by the eligible beneficial owner.

The customer can reclaim withholding tax on behalf of the beneficial owner through Clearstream Banking by submitting the appropriate documentation.

Residents of Spain cannot apply for standard refund of withholding tax through Clearstream Banking.