Non-application of domestic withholding tax exemption to interest paid to Swiss finance branches

The Ley del Impuesto sobre la Renta de No Residentes (Royal Legislative Decree 5/2004 of 5 March 2004 on Income Tax of Non-residents) provides that interest and other income from the transfer to third parties of own capital received by residents of an EU Member State, or by a permanent establishment (PE) of such entities situated in another Member State, will be tax exempt if paid by entities or PEs resident in Spain. However, there was an issue over the applicability of the exemption to interes…