Spanish Withholding Tax

[Claymore Games]

Hi,

We published a Mobile Phone Game through a UK company a little over a year ago. However they were recently bought over by a Spanish company and so now we are being paid through this parent company which has meant they have started taking 10% withholding tax.

We managed to get it reduced down to 10% with a tax residence certificate (after much confusion!),but I've been wondering if we ever get to see this 10% again?

It seems a little unfair to be taking this money in the first place (altough, I'm not blaming the company) and I have a few questions that I'm hoping someone can answer (searching through the Internet and the HMRC's website hasn't helped much).

1) As we've already been taxed 10%, does this mean we don't need to pay more tax in the UK (or pay a reduced tax on it)?

2) Can we reclaim this 10%? (From what I've found on the Internet this doesn't seem likely, but I have to ask!)

Thanks to anyone who can shed some light on this.

Brian.

 

[Gouldie0]

Hi Brian,

This does seem a little strange and without a little more information it would be hard to advise you properly. Generally a 'dual taxation agreement' exists when there is a different residency of an employee or working from the parent company who's paying them. It could be the case that you can reclaim the 10% if it is on this basis, however the figure of 10% is odd aswell.

Can you PM me with a little more information and I'll gladly help or point you in the right direction.

Kind Regards

Neil

 

[Claymore Games]

Hi Neil,

I've sent you a PM with some more details - thank you very much for helping me!

Brian.

 

[Scottish Business Owner]

Hi Brian,

Witholding tax occurs in many parts of the world. I know for example that Canada also has a similar scheme where the witholding tax is taken at source and then it's on the onus of the company to try and reclaim the deduction direct from the canadian revenue service.

I would suspect with Spain though given that it's in the EU that some sort of double taxation protection would be in place. I would think that you would be able to offset this against either corporation tax (being a company) or self assessment (if an individual). I have to agree though researching it online is far from easy.

I would be speaking with HMRC direct as I think there must be some recent issues with this (i'm thinking about when Santander took over Abbey National). I think I would also go back to the company concerned and ask them to refer you to specific guidance that permits them to deduct these funds.

Just some other suggestions

 

[Claymore Games]

Hi ,

Thanks for the tips! I never thought about the Santander takeover.

A phone call to the HMRC was going to be my next step, I was hoping to have some ammunition to back me up before I called them though. I find it always helps to be able to guide them in the right direction.