The Spanish Supreme Court rules that the tax authorities have the burden of proving an abuse to deny the withholding tax exemption on EU dividends

The anti-abuse clause in article 14(1)(h) of the Non-Resident Income Tax Law (in the version in force until 1 January 2015) infringed EU law because it established a general presumption of abuse and fraud that transfers onto the taxpayer the burden of proving the lack of abuse. This anti-abuse clause must be construed in such a way that the Spanish tax authorities have the burden of proving in each specific case that all the elements of an abusive practice are present to deny the Spanish dividend withholding tax exemption.

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