Double Tax Treaties in SpainUpdated on Monday 18th April 2016
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A foreign investor who is doing business in Spain and comes from a country that Spain has signed a double tax treaty with can benefit from the avoidance of double taxation. This is very important, especially for a long term, for a business because the investor can save a lot of money if he knows the local and international regulations related to taxation.
Double tax treaties are signed by a large number of countries all around the world and they permit a foreign investor to pay taxes in only one country and not in both – his residence country and the other one in which he opened a company. The only condition is that a double tax treaty to be signed between the two countries.
Spain has signed double tax treaties with over 80 countries all over the world and, according to these treaties, certain types of income, such as dividends, capital gains and royalties, are exempt from taxation or benefit from low rates of taxes.
Content of Spanish double tax agreements
All Spain’s double tax treaties establish the methods used to avoid double taxation. Among the most employed methods are tax credits against the taxes paid in the other contracting state or deductions. The agreements also contain special clauses related to permanent establishment and associated enterprises of foreign companies operating in Spain and provide for their taxation. Most the Spain’s double taxation conventions cover the income and corporate taxes levied in the contracting states, as well as different components of the income, such as:
- - income derived from immovable property;
- - income derived from employment of citizens of one state in the other;
- - capital gains;
- - income derived from air and maritime transport.
Our lawyers in Spain can provide you with more information about the taxation of income under the country’s double tax agreements.
Treaties signed by Spain
The double taxation treaties were signed by Spain and the following countries: Albania, Algeria, Armenia, Barbados, Australia, Austria, , Cyprus, Belgium, Bolivia, Bosnia, Brazil, Bulgaria, Canada, Chile, China, Columbia, Costa Rica, Croatia, Cuba, Cyprus, Czech Republic, Germany, Denmark, Kyrgyzstan, Ecuador, Egypt, El Salvador, Estonia, Finland, Romania, France, Georgia, Germany, Greece, Hungary, Iceland, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Kazakhstan, Korea, Latvia, Lithuania, Luxembourg, Macedonia, Malaysia, Malta, New Zealand, Mexico, Moldova, Morocco, the Netherlands, Norway, Pakistan, Panama, Philippines, Poland, Portugal, , Russia, Saudi Arabia, Serbia, Slovakia, Slovenia, South Africa, Sweden, Switzerland, Tajikistan, Thailand, Trinidad & Tobago, Tunisia, Turkey, Turkmenistan, United Arab Emirates, United Kingdom, USA, Uruguay, Uzbekistan, Venezuela and Vietnam.
In the next years, other double tax treaties are expected to be signed by Spain with other countries. If you come from a country that is not listed above, you should check if a treaty has been signed meanwhile.
For details about avoiding double taxation, you may contact our law firm in Spain. Our Spanish attorneys will also offer you advice about how you can benefit from the minimization of the taxes you must pay.