We would like to highlight a recent Spanish Supreme Court judgment concerning the taxation of dividends received by non-resident investment funds: Judgment No. 713/2026 of 9 June 2026 (Mora Multistrategy Fund FI, Andorra).
In our view, the judgment does not represent a substantive difference from the Supreme Court's existing case law. It should instead be read as a further confirmation of the doctrine established in the landmark judgments of 5 April 2023 and subsequently reaffirmed in the decisions delivered in March 2025.
The Court expressly presents its ruling as an application of its settled case law on the comparability of non-resident collective investment vehicles with Spanish resident investment funds.
A relevant feature of the case is that the Spanish State Attorney's Office acquiesced to the claim, expressly acknowledging that the matter was materially aligned with prior Supreme Court rulings. This further evidences the degree of consolidation of the Court's case law in comparable fact patterns.
The Supreme Court reiterates that Spanish legislation is incompatible with the free movement of capital under Article 63 TFEU where non-resident funds in a comparable position are subject to materially less favourable tax treatment than Spanish resident investment funds. In particular, the Court refers to the difference between the 1% corporate income tax regime applicable to resident funds and the Spanish withholding tax levied on dividends paid to non-resident funds, generally at 19% or at the applicable treaty-reduced rate.
The Court also confirms that comparability does not require strict legal identity with a Spanish fund. The analysis should focus on whether the non-resident fund has the essential features that justify the favourable tax treatment granted by the Spanish legislator to resident collective investment vehicles.
The judgment restates the comparability criteria developed in the Supreme Court's prior case law. A non-resident fund should generally be regarded as comparable where it can evidence that:
- it raises capital collectively from investors;
- it operates as an open-ended collective investment vehicle;
- it has been duly authorised by the competent supervisory authority in its jurisdiction of residence
- it is managed by an authorised and supervised investment manager; and
- it is subject to an appropriate regulatory and supervisory framework.
The Court also reiterates that the initial burden of proof lies with the claimant fund. However, once the taxpayer has provided serious and credible evidence of comparability, the Spanish tax authorities may not impose disproportionate evidentiary requirements and must make effective use of the exchange-of-information mechanisms available under the relevant tax treaty and international cooperation framework.
The fact that the claimant was an Andorran investment fund is noteworthy, given Andorra's specific tax profile. The Court nevertheless applied its settled comparability doctrine and accepted that the Spain-Andorra exchange of information framework was sufficient for the assessment.
From a practical perspective, the judgment provides further confirmation that the Supreme Court's case law on WHT reclaims by non-resident investment funds is now well established. It supports the position that, where the relevant comparability criteria are met, a discriminatory withholding tax burden imposed on non-resident funds is contrary to the free movement of capital and may give rise to a refund claim.
Accordingly, the judgment should not be viewed as a change in the Court's approach, but rather as an additional authority confirming and consolidating the line of case law initiated by the Supreme Court in April 2023 and reaffirmed in 2025 and 2026.
