Reduced Withholding on
Certain Spanish Investments

Certification forms are now available from the Internal Revenue Service for U.S. residents who receive interest, dividends and royalties from payers in Spain and wish to claim a reduced rate of withholding.

Most income tax treaties provide a reduction in the statutory rate of tax, or an exemption from tax, on certain types of income received from sources within the foreign treaty country. Taxpayers generally must furnish the foreign government with a certification that a U.S. income tax return was filed by the applicant as a citizen, domestic corporation or resident of the United States.

The recently concluded U.S.-Spain Income Tax Convention permits U.S. residents who receive dividends, interest and royalties to claim a reduced rate of withholding from their payer in Spain, or request a refund from the Ministry of Finance in Spain, if excess income tax is withheld. The provisions of the Convention are effective for dividends, interest and royalties paid or credited after Jan. 1, 1991.

To claim either the reduced withholding or a refund, taxpayers should contact the IRS service center where they filed their most recent tax return to request a certification form.

Requests must include the applicant's name, social security or employer identification number, tax return form number, tax period for which certification is requested and a statement of residency in the U. S. signed under penalties of perjury.

The IRS will mail the completed certification form to the applicant for transmittal to the taxpayer's withholding agent in Spain or to the Ministry of Finance.

For additional information, including the addresses of the tax treaty certification units at the IRS service centers, all the IRS toll free at 1-800-829-3676 and ask for Publication 686, "Certification for Reduced Tax Rates in tax Treaty Countries." Overseas taxpayers may order the publication by writing to:

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