Double Taxation

Double taxation occurs when the same income is taxed twice: a foreign company's dividend first suffers withholding in its home country and is then taxed in Spain as savings income. Without correction, a US dividend would pay 15% there and from 19% here — more than a third of the payment gone.

To prevent this there are double-taxation treaties: bilateral agreements that split the tax pie between the two countries and let you credit in Spain what was already paid abroad, within limits.

How the correction works, with numbers

The mechanism is the international double-taxation credit in your tax return:

US case (treaty at 15%): €100 dividend. Withholding at source: €15. Spain's tax is 19% (€19), but you credit the €15 already paid → you pay €4. Effective total: 19% — double taxation fully corrected.

Swiss case (35% withholding): €100 dividend. Switzerland keeps €35. Spain only allows crediting up to the treaty limit (€15) → you pay another €4 here. You have borne €39 in total, and the €20 over-withheld does not come back through your Spanish return: it must be claimed from the Swiss administration with its own forms. Until you do, that excess is genuine double taxation.