Out of all double tax treaties (DTTs) in force in 2012, around 41% are symmetric and 59% are asymmetric, i.e., they prescribe different dividend withholding tax rates (WTRs) depending on the foreign investor’s ownership fraction. The paper investigates the reasons for this phenomenon, namely why some countries in their DTTs prefer homogenous withholding tax rates over separate rates for participation and portfolio dividends. In a theoretical model, I demonstrate why home countries may have an interest in a high withholding tax rate in the host country, even though they do not receive the revenue from this tax. Further, I find confirming evidence that a reason for having asymmetric withholding tax rates on dividends is an existing spatial dependence on the rates of the countries’ peers that may be a driving factor for setting asymmetric rates. Finally, I confirm that the spread itself (i.e., the difference between the portfolio and participation dividends negotiated in the tax treaty) is also affected by the peer countries.