Spanish Tax Information

Spanish tax on 2015 final dividend for all shareholders

This note provides an overview of the taxation of shareholders on a dividend paid out of share premium. It is addressed to shareholders in general. This note does not apply to dividends, or parts of dividends, paid otherwise than out of share premium, guidance in relation to which is provided for UK shareholders in the FAQ section of this website and in the below document. To the extent a dividend is paid out of share premium, this note overrides that other guidance.

As a general rule, to the extent a dividend is paid by IAG out of its share premium account, the dividend is not subject to Spanish withholding tax. For Spanish tax purposes, such a dividend is treated as a return of the amount invested and so as a reduction in the shareholder's tax basis in the IAG shares.

For example, where a shareholder's acquisition cost and therefore the shareholder's base cost of each share, as determined in accordance with Spanish tax laws and regulations, is €6.00 and a dividend of €0.05 is paid out of share premium, the shareholder carries forward a tax basis of €5.95 and no taxable income arises. In such a case, for non-Spanish resident shareholders, in the event that a dividend is paid solely out of IAG's share premium account, there is no requirement to file a Spanish tax return. Where amounts received exceed the tax basis of the shares, the excess is taxed in Spain as dividend income and may result in a requirement to file a Spanish tax return.

Spanish corporate shareholders need to consider the accounting treatment applicable to the dividend in order to determine the correct tax treatment relevant to the dividend.

All shareholders will also need to comply with the tax law in their country of residence. Whether any tax consequences arise in that country from the receipt of a dividend paid out of share premium is a matter of tax law in that country. Any shareholder uncertain of their position should seek independent advice.

Spanish dividend withholding tax for UK resident shareholders

Under Spanish Law dividends derived by a holder of ordinary shares who is not resident in Spain for tax purposes are, as a general rule, subject to Spanish withholding tax.

For further information, please download the following document:
Spanish Tax information on dividends for UK shareholders

Spanish tax on disposals of IAG shares for UK resident shareholders

No charge to Spanish tax should arise to IAG UK resident shareholders on a disposal of IAG Shares provided that they are the absolute beneficial owners of their IAG shares, do not carry on business through a permanent establishment in Spain with which their holding of IAG shares is effectively connected and the relevant formalities are complied with.

For further information, please download the following document:
Spanish Tax information on Gains realised on IAG shares by UK resident shareholders


Form 210 Guidance Notes