Spanish National High Court overturns denial of withholding tax exemption on dividend payments to EU shareholder

Executive summary

The Spanish National High Court issued a Decision on 25 May 2021 (the Decision), recently published, upholding the withholding exemption for dividend payments (DWHT) by a Spanish company to a Luxembourg company. This decision overturns the criteria of the Spanish tax authorities, which had rejected the withholding exemption on the basis that the latter is not incorporated for valid business reasons.

The Spanish implementation of the European Union (EU) Parent-Subsidiary Directiv…