New rates for withholding taxes applicable in Spain as from 2012

10 January 2012

The new rates for withholding taxes (WHT) are a consequence the general and temporaly increment of taxes in Spain that was approved by the Spanish Government through Royal Decree-law 20/2011, of 30th of December, of urgent matters on budget, taxes and financial issues to correct the public deficit (BOE of 31 December 2011).

Concretely, we would like to highlight the following increments of the WHT’s rates:

• Salaries and wages: the new WHT’s are applicable as a consequence of the increment on the tax rates for the Spanish Individual Income Tax. However, Royal Decree-law 20/2011 establishes that the WHT’s that correspond to the January remunerations wiill not take into consideration the abovementioned increment. Therefore, the new WHT’s will apply as from the salaries that correspond to the month of February and subsequent months.

  • Directors: the WTH is increased from 35% to 42%.
  • Dividends and interest: the WTH is increased from 19% to 21%.
  • Capital gains: the WTH is increased from 19% to 21%.
  • Real Estate leasing: the WTH is increased from 19% to 21%.
  • Non-Residents: the general WTH is increased from 24% to 24.75% and the specific for dividends, interest and capital gains from 19% to 21%.

For further information, please contact José Blasi: jblasi@mmmm.es