Reclaiming Spanish Withholding tax

Reclaiming Spanish Withholding tax

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Hello,

This concerns a UK Charity which specialises in musical performance and does a lot of work in Spain. The Spanish promoters are insisting that 24.75% Spanish withholding tax be levied on their fees in Spain. This, despite the fact that the group is a registered charity and would not pay tax in the UK on the same income. Can anybody suggest either a form that can be filled in to satisfy the Spanish authorities of the non-need to withhold tax or a method to reclaim the tax from the Spanish authorities.

Many thanks,

 

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By WhichTyler
27th Jun 2014 16:04

It can be done, I think...

I have been able to do a similar thing with groups coming to the UK by showing that:

1. The fee goes to the company, not the individual performers

2. The individuals are not beneficial owners of the company

3. The individuals have uk tax deducted on their salary (i.e they are on PAYE for the tour)

 

But the costs of trying to convince Spanish tax authorities of the above, or hiring someone with local knowledge to do so, may not be worth it...

Make sure the fee is net set after deduction next time...

 

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By jvenegas16
27th Jun 2014 19:05

No permanent establishment in Spain

The issue arises because the charity does not have a permanent establishment in Spain, and there is an obligation for the payer to withhold tax.

I am surprised that the charity has not registered in Spain, filing form 036, as VAT could be another element to consider. The activity is taking place in Spain.

 

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