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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10104
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I am exporting product to spain and they are asking Withholding

Customer Question

I am exporting product to spain and they are asking for a Withholding tax certificate to avoid added taxes from the Spanish government. Do you know what form is required ?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.
Hi,This is generally needed by foreign national RECEIVING US income to show the US PAYOR that no withholding is allowed..See this:http://www.irs.gov/Individuals/International-Taxpayers/Withholding-Certificate-Forms-Under-IRC-Sections-1441-1464.Not sure that I see how this applies ... the other possibiity is something showing that no VAT tax is due becasue the US doesn't participate in that system, but there ius no US certificate for that ... that would likely come from the Spanish Government..Can you give me a few more details? Are you a US entity/person? The nature of the product your exporting?... There is another U.S. certificate for decreased or no withholding that DOES ap to US sellers to foreign buyers, but that is for FIRPTA withholdiing on Real property interests: http://www.irs.gov/Individuals/International-Taxpayers/Withholding-Certificates.Finally, there is a W4-(SP) that's used for foreign EMPLOYEES of US companies: http://taxmap.ntis.gov/taxmap/ts0/formw4spemployeesw_f_60159be0.htm.But again, for a US person exporting a PRODUCT to spain I would think that this has to do either with the fact that there is no VAT tax in the US. US has no such certificate..Again, an you tell me more about (1) Your status (US preson or tax resident) (2) the type of taxes in Spain that they are referencing and (3) any indication of whether they are expercting a US or sa Spanish certificate?.Thanks, ***** ***** can go from there
Customer: replied 1 year ago.
We are a US company and US citizen and this is what they have said.This is to inform you that according to the Spanish tax legislation, our company are obligated to charge an amount of 24% of Spanish withholding tax on payments to non-Spanish legal entities.The only was to consider if a reduced or exempt withholding tax rate may applicable in your case, is by receiving from you and original copy of a tax certification, issued by the tax authorities of your country of residence, stating that your company is tax resident in your country within the meaning of double tax convention of spain. They said the certificate is good for 12 months..
Expert:  Lane replied 1 year ago.
Yep, was just looking at comments from others ... this is completely specific to Spain's withholding tax, and causes problems for the very same reason - MANY taxing authorities (just as US) do not have such a certificate..What they are looking for is proof that you are un-deed not a spanish resident or company and satisffied your taxing requirements.).I have seen non-US exporters satisfy the requirement by getting a letter from their local taxing authority..I have a calll into the international dividision of PWC to see what they recommend ... in the mean-time, see, this:http://www.proz.com/forum/business_issues/126647-company_in_spain_asking_a_fiscal_residence_certificate_from_ltd_company.html.Be Right Back
Expert:  Lane replied 1 year ago.
OK, got it:http://www.irs.gov/Individuals/International-Taxpayers/Form-6166---Certification-of-U.S.-Tax-Residency
Expert:  Lane replied 1 year ago.
Here's the appliction itself: Form 8802, Application for United States Residency Certification
Expert:  Lane replied 1 year ago.
Form 6166 is a letter printed on U.S. Department of Treasury stationery certifying that the individuals or entities listed are residents of the United States for purposes of the income tax laws of the United States. You may use this form to claim income tax treaty benefits and certain other tax benefits in foreign countries. Please refer to the instructions for Form 8802.Some additional information will also be required in order to obtain certification under the new procedures. This information is generally set forth in the Instructions to Form 8802.
Expert:  Lane replied 1 year ago.
So, my apologies.... We do have such a form.Here are all the related links: References/Related Topics Certification of U.S. Residency for Tax Treaty PurposesForm 8802, Application for United States Residency Certification – Additional Certification RequestsTax Treaties.Hope this helps.Lane.If this HAS helped, I would appreciate a positive rating (using the stars or smiley faces on your screen)… That’s the ONLY WAY I'll be credited for the work here, Thanks