Finland

This Convention applies to persons resident in one or both Contracting States.

1. This Convention applies to income and property taxes payable by each Contracting State, public associations and local authorities, irrespective of the system of their levy.

2. Income and property taxes are defined as taxes on all or any part of the income or property, including taxes on profits resulting from the disposal of movable or immovable property, taxes on the amount of wages paid by enterprises (not including social security contributions), as well as taxes on capital gains.

3. The current taxes to which this Convention specifically applies are;

(a) In Spain:

(1) the General Personal Income Tax;

(2) the General Income Tax for Companies and Other Legal Entities, including the special charge of 4 per 100 established by Article 104 of Law 41/1964 of 11 June;

3) the following taxes on account: the Territorial Contribution on Rustic and Pecuaria Wealth, the Territorial Contribution on Urban Wealth, the Personal Labour Returns Tax, the Capital Income Tax and the Tax on Commercial and Industrial Activities and Benefits;

(4) In Fernando Poo, Rio Muni, Sahara and Ifní, taxes on income (on labour and property returns) and on the profit of enterprises;

5. for undertakings governed by the Act of 26 December 1958 engaged in the investigation and exploitation of hydrocarbons, in addition to the other taxes listed in this Article, the area tax, the gross product tax and the special tax on the profits of such companies;

6. local taxes on income or wealth (hereinafter referred to as 'the Spanish tax').

(b) In Finland:

(1) State Income and Wealth Tax;

2) Local Income Tax:

(3) Church tax;

(4) Marine tax (hereinafter referred to as the Finnish tax)

4. This Convention shall also apply to future taxes of an identical or similar nature which are added to or replaced by existing taxes. Each year, the competent authorities of the Contracting States shall notify each other of any amendments made to their respective tax laws,

1. This Convention, unless otherwise interpreted:

(a) the term 'Spain' means the Spanish State (and when used geographically, Peninsular Spain, the Balearic Islands and the Canary Islands, the Spanish Steps and Provinces in Africa and Equatorial Guinea, formed by the territories of Rio Muni and Fernando Poo, these two territories in self-determination process);

(b) the term ‘Finland’ means the territory of the Finnish Republic;

(c) the expressions of a Contracting State and of the other Contracting State mean Spain or Finland, as derived from the text;

(d) the term ‘person’ includes natural persons, companies and any other grouping of persons;

(e) the term 'company' means any legal person or any entity that is to be considered a legal person for tax purposes;

(f) the words ‘undertaking of one Contracting State and ‘undertaking of the other Contracting State’ mean, respectively, an undertaking operated by a resident of a Contracting State (including the State itself, its public associations and local authorities) and an undertaking operated by a resident of the other Contracting State (including the State itself, its public associations and local authorities);

(g) the expression ‘competent authority’ means:

1. in Spain:

the Minister of Finance, the Director-General of Direct Taxes or any other Authority to which the Minister delegates:

2. in Finland:

the Minister of Finance,

2. For the purposes of the application of this Convention by a Contracting State, any expression not otherwise defined shall, unless the text requires a different interpretation, have the meaning attributed to it by the law of that Contracting State concerning the taxes which are the subject of this Convention.

1. For the purposes of this Convention, ‘resident of a Contracting State’ means any person who, under the law of that State, is subject to taxation in that State by reason of his domicile, residence, address or any other criterion of a similar nature.

2. Where, under the provisions of paragraph 1, a natural person is resident in both Contracting States, the case shall be settled in accordance with the following rules:

(a) This person shall be considered a resident of the Contracting State in which he or she has a permanent dwelling at his or her disposal. If it has a permanent dwelling available in both Contracting States, it shall be considered a resident of the Contracting State with which it maintains closer personal and economic relations (centre of vital interests);

(b) If the Contracting State in which that person has the centre of his or her vital interests cannot be determined, or if he or she does not have permanent housing at his or her disposal in any of the Contracting States, he or she shall be considered a resident of the Contracting State in which he or she habitually lives;

(c) if he or she is habitually resident in both Contracting States or does not live in either Contracting State, he or she shall be considered a resident of the Contracting State of which he or she is a national;

(d) if he is a national of both Contracting States unless he is a national of either Contracting State, the competent authorities of the Contracting States shall decide the case by mutual agreement.

3. Where, under the provisions of paragraph 1, a corporation is resident of both Contracting States, it shall be considered a resident of the Contracting State in which its place of effective management is located.

1. For the purposes of this Agreement, the term ‘permanent establishment’ means a fixed place of business in which an undertaking carries out all or part of its activity.

2. The term ‘permanent establishment’ includes, in particular:

(a) the head offices;

(b) branches;

(c) Offices;

(d) factories;

(e) Workshops;

(f) mines, quarries or any other place of extraction of natural resources;

(g) construction or assembly works lasting more than 12 months.

3. The term ‘permanent establishment’ does not include:

(a) the use of facilities for the sole purpose of storing, displaying or delivering goods belonging to the undertaking;

(b) the maintenance of a warehouse of goods belonging to the undertaking for the sole purpose of storing, displaying or delivering them;

(c) the maintenance of a warehouse of goods belonging to the undertaking for the sole purpose of processing by another undertaking;

(d) the maintenance of a fixed place of business for the sole purpose of buying goods or collecting information for the undertaking;

(e) the maintenance of a fixed place of business for the sole purpose of advertising, providing information, conducting scientific research or carrying out other similar activities which are preparatory or auxiliary in nature, provided that such activities are carried out for the undertaking itself.

4. A person acting in a Contracting State on behalf of an undertaking of the other Contracting State, except in the case of an independent agent covered by paragraph 5, is considered to constitute a permanent establishment in the State first mentioned if he or she habitually has and exercises in that State powers to conclude contracts on behalf of the undertaking, unless his or her activities are limited to the purchase of goods for the enterprise.

5. It is not considered that an enterprise in a Contracting State has a permanent establishment in another Contracting State merely because it carries out activities in that other State through a broker, a general commissioner, or any other mediator enjoying an independent status, provided that these persons act within the ordinary framework of their activity.

6. The fact that a company resident of a Contracting State controls or is controlled by a company resident of the other Contracting State or engaged in activities in that other State (whether by permanent establishment or otherwise) does not in itself make any of these companies permanent establishment of the other State

1. Income from immovable property may be taxed in the Contracting State in which such property is situated.

2. The term ‘real property’ would be defined in accordance with the law of the Contracting State in which the property is situated. In any event, the term includes accessories, livestock and equipment used on agricultural and forestry holdings the rights to which the provisions of private law relating to territorial property, the use of immovable property and the rights to receive variable or fixed fees for the exploitation or concession of the exploitation of mineral deposits, sources or other land wealth apply. Ships, vessels and aircraft are not considered real property.

3. The provisions of paragraph 1 apply to income derived from the direct use, lease or any other form of exploitation of immovable property.

4. The provisions of paragraphs 1 and 3 also apply to income derived from the immovable property of enterprises and from immovable property used for the exercise of professional services.

1. The profits of an enterprise in one Contracting State may be taxed in that State only, unless the enterprise carries out operations in the other State through a permanent establishment located in that State. In the latter case, the profits of the company may be taxed in the other State but only to the extent that they can be attributed to the permanent establishment.

2. Where an undertaking of one Contracting State engages in business in the other Contracting State through a permanent establishment situated therein, in each Contracting State, the permanent establishment shall be assigned the benefits it would obtain if it were a separate and separate undertaking carrying out the same or similar activities, under the same or similar conditions, and dealt entirely independently with the undertaking of which it is a permanent establishment.

3. For the purpose of determining the benefit of the permanent establishment, the deduction of expenses for the purposes of the permanent establishment shall be permitted, duly demonstrated, including management and general administrative expenses for the same purposes, equally demonstrated, whether incurred in the State in which the permanent establishment is located or elsewhere.

4. As long as it is customary in a Contracting State to determine profits attributable to permanent establishments on the basis of a total distribution of profits of the enterprise among its various parties, the provisions of paragraph 2 shall not prevent that Contracting State from determining taxable profits in this manner; however, the method of distribution adopted shall be such that the result obtained is in accordance with the principles set forth in this article.

5. No benefit shall be attributed to a permanent establishment merely because it buys goods for the undertaking.

6. For the purposes of the preceding paragraphs, the profits attributable to the permanent establishment shall be calculated each year by the same method, unless there are valid and sufficient grounds for otherwise proceeding,

7. Where profits include income covered separately by other articles of this Convention, the provisions of those articles shall not be affected by those of this Article.

Profits from operating ships or aircraft in international traffic may be taxed only in the Contracting State in which the effective head office of the company is located.

When:

(a) an undertaking of a Contracting State participates, directly or indirectly, in the direction, control or capital of an undertaking of the other Contracting State; or

(b) the same persons participate, directly or indirectly, in the direction, control or capital of an undertaking of one Contracting State and of an undertaking of the other Contracting State, and in either case the two undertakings are, in their commercial or financial relations, bound by terms, accepted or imposed, which differ from those agreed upon by independent undertakings, the profits which one of the undertakings would have obtained if these conditions did not exist and which in fact did not occur because of them, may be included in the profits of that undertaking and subject to taxation accordingly.

1. Dividends paid by a company resident of one Contracting State to a resident of the other Contracting State may be taxed in the latter State.

2. However, these dividends may be taxed in the Contracting State in which the company that pays the dividends resides and in accordance with the law of that State, but the tax thus required may not exceed the amount

(a) 10 per cent of the gross amount of dividends if the benefit is a company (excluding companies of persons) which owns directly at least 25 per cent of the capital of the company which pays them;

(b) 15 per 100 of the gross amount of dividends, in all other cases.

The competent authorities of the Contracting States shall, by mutual agreement, determine how these limits are to be applied.

This paragraph does not affect the company's taxation of profits from which dividends are paid.

3. The term ‘dividends’, used in this Article, includes the income from shares, shares or vouchers, parts of mines, shares of founders or other rights, except credit rights, which permit participation in profits, as well as income from other shareholdings treated as income from shares under the tax legislation of the State in which the distribution company resides.

4. The provisions of paragraphs 1 and 2 do not apply if the dividend beneficiary, resident of one Contracting State, has in the other Contracting State of residence the corporation that pays the dividends, a permanent establishment with which the share generated by the dividends is effectively linked. In this case, the provisions of Article 7 apply.

5. Where a company resident of one Contracting State obtains profits or income from the other Contracting State, that other State may not levy any tax on dividends paid by the company to persons who are not residents of the latter State, nor subject the undistributed profits of the company to a tax on them, even if dividends paid or profits not distributed consist, in whole or in part, of profits or income from that other State.

1. Interest from one Contracting State paid to a resident of the other Contracting State may be taxed in the latter State.

2. However, these interests may be subject to taxation in the Contracting State from which they come and in accordance with the law of that State, but the tax thus required may not exceed 10 per cent of the amount of interest.

The competent authorities of the Contracting States shall, by mutual agreement, determine how this limit is to be applied.

3. The term ‘interest’, used in this article, includes the income from the public debt, from bonds or bonds with or without mortgage guarantee and entitled or not to participate in profits, and from claims of any kind, as well as any other income that the tax legislation of the State from which the interest derives assimilates to the income from the amounts given to the loan.

4. The provisions of paragraphs 1 and 2 do not apply if the beneficiary of the interest, resident of one Contracting State, has in the other Contracting State from which the interest originates, a permanent establishment with which the claim generating the interest is effectively linked. In this case, the provisions of Article 7 apply.

5. Interests are considered to come from a Contracting State when the debtor is the State itself, one of its public associations, local entities, or a resident thereof. However, where the debtor of interest, whether or not it is resident of a Contracting State, has a permanent establishment in a Contracting State in respect of which the debt giving rise to the interest has been incurred and this establishment supports the payment thereof, the interest shall be deemed to have come from the Contracting State in which the permanent establishment is located.

6. Where, due to special relationships between the debtor and the beneficiary of the interest or between the two and any other person, the amount of interest paid, having regard to the claim for which it is paid, exceeds the amount that would have been agreed by the debtor and the beneficiary in the absence of such relations, the provisions of this Article shall apply only to the latter amount. In this case, the excess may be imposed in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.

1. Fees from one Contracting State paid to a resident of the other Contracting State may be taxed in the latter State.

2. However, these fees may be taxed in the Contracting State concerned and in accordance with the law of that State, but the tax thus required may not exceed 5 per 100 of the gross amount of the fees.

The competent authorities of the Contracting States shall, by mutual agreement, determine how this limit is to be applied.

3. The term ‘royalties’ used in this article includes amounts of any kind paid for the use or granting of copyright on literary, artistic or scientific works, including cinematographic films, patents, trademarks, designs, plans, formulas or secret procedures, as well as for the use or granting of use of industrial, commercial or scientific equipment, and amounts paid for information relating to industrial, commercial or scientific experience.

4. The provisions of paragraphs 1 and 2 do not apply if the beneficiary of the royalties, resident of one Contracting State, has, in the other Contracting State from which the royalties originate, a permanent establishment with which the right or ownership for which the royalties are paid is effectively linked. In this case, the provisions of Article 7 apply.

5. Fees are considered to come from a Contracting State when the debtor is the State itself, one of its public associations, one of its local entities, or a resident thereof. However, where the debtor of the royalties, whether or not he is a resident of a Contracting State, has in a Contracting State a permanent establishment to which the benefit for which the royalties are paid is linked and this establishment supports the payment of the royalties, the fees shall be deemed to be from the Contracting State where the permanent establishment is located.

6. Where, due to special relations between the debtor and the beneficiary in the absence of such relations, the provisions of the royalties, or between them and any other person, the amount of the fees paid, having regard to the benefit for which they are paid, exceeds the amount that would have been agreed by the debtor and the beneficiary in the absence of such relationships, the provisions of this Article shall apply only to the latter amount. In this case, the excess may be imposed in accordance with the law of each Contracting State taking into account the other provisions of this Convention.

1. Gains from the disposal of immovable property, as defined in article 6, paragraph 2, may be taxed in the Contracting State in which they are located.

2. Gains from the disposal of movable property forming part of the assets of a permanent establishment held by an enterprise of one Contracting State in the other Contracting State, or from movable property belonging to a fixed basis held by a resident of one Contracting State in the other Contracting State for the provision of professional services, including gains from the disposal of the permanent establishment (alone or with the enterprise as a whole) or from the fixed base, may be taxed in that other State. However, gains arising from the disposal of movable property referred to in article 22, paragraph 3, may be taxed only in the Contracting State to which, under that article, the right to tax them belongs.

3. Profits arising from the disposal of any property other than those referred to in paragraphs 1 and 2 may be taxed only in the State in which the transferor resides.

1. Income obtained by a resident of a Contracting State through the provision of professional services or the pursuit of other independent activities of a similar nature may only be taxed in that State unless that resident normally has a fixed basis in the other Contracting State for the pursuit of his activity. In the latter case, such income may be taxed in the other State, but only to the extent that it is appropriate to attribute it to the fixed base.

2. The term ‘professional services’ includes, in particular, scientific, literary, artistic, educational or educational activities, as well as independent activities of doctors, lawyers, engineers, architects, dentists, accountants and mediators.

1. Without prejudice to the provisions of articles 16, 18 and 19, salaries, salaries and similar remuneration obtained by a resident of a Contracting State on account of employment may be subject to taxation in that State only, unless the employment is exercised in the other Contracting State. If employment is exercised in the latter State, the remuneration derived therefrom may be subject to taxation in that State.

2. Notwithstanding the provisions of paragraph 1, remuneration obtained by a resident of a Contracting State on the basis of employment in the other Contracting State may only be taxed in the former State if

(a) the employee does not remain in total in the other State, in one or more periods, more than one hundred and eighty-three days during the fiscal year concerned; and

(b) remuneration is paid for or on behalf of a person who is not a resident of the other State; and

(c) remuneration is not borne by a permanent establishment or a fixed basis which the person for whom work is performed has in the other State,

3. Notwithstanding the preceding provisions of this article, remunerations earned on account of employment on board a ship or aircraft in international traffic may be subject to taxation in the Contracting State where the place of effective management of the undertaking is located.

Participations, attendance allowances and similar remunerations which a resident of a Contracting State obtains as a member of a Board of Directors or of a company resident of the other Contracting State may be subject to taxation in that other State.

Notwithstanding the provisions of Articles 14 and 15, the rents obtained by the professionals of the spectacle, such as theatre, cinema, radio and television artists and musicians, as well as by the athletes, for their personal activities in this regard, may be subject to taxation in the Contracting State where they act.

1. Without prejudice to the provisions of article 19, paragraph 1, pensions and similar remuneration paid, in consideration of previous employment, to a resident of a Contracting State may be subject to taxation only in that State.

1. Remuneration, including pensions, irrespective of the beneficiary, paid, directly or from a special fund, by a Contracting State, one of its public associations or local entities, an autonomous body or a legal person under public law of that State, to a natural person, in consideration of services rendered in the performance of public functions, may be subject to taxation only in the Contracting State from which such remuneration comes.

2. The provisions of articles 15, 16 and 16 apply to remuneration and pensions paid for services rendered in connection with commercial or industrial activities carried out by a Contracting State, one of its public associations or local authorities.

1. A resident of a Contracting State who, at the invitation of a university, college or other institution of higher education or scientific research of the other Contracting State, visits that other State solely for the purpose of teaching or conducting scientific research in that institution, for a period not exceeding two years, shall not be taxed in that other State for the remuneration he receives for such teaching or research activities.

2. The amounts that a student or a trainees, who is or has previously been a resident of a Contracting State and who is in the other Contracting State for the sole purpose of continuing his studies or completing his or her training, receive to cover his or her costs of maintenance, studies or training, shall not be subject to taxation in the latter State, provided that such amounts come from sources outside that State.

The income of a resident of a Contracting State not expressly mentioned in the preceding articles may only be taxed in that State.

1. Property constituted by immovable property, as defined in article 6, paragraph 2, may be subject to taxation in the Contracting State in which the property is situated.

2. Property consisting of movable property forming part of the assets of a permanent establishment of an undertaking, or of movable property belonging to a fixed base used for the pursuit of a professional activity, may be taxed in the Contracting State in which the permanent establishment or fixed base is situated.

3. Ships and aircraft engaged in international traffic and assets, other than immovable property, having an interest in their operation, may be subject to taxation only in the Contracting State in which the place of effective management of the undertaking is situated.

4. All other assets of a resident of a Contracting State may be subject to taxation only in that State.

1. Where a resident of a Contracting State obtains income or possesses property which, in accordance with the provisions of this Convention, may be taxed in the other Contracting State, the first State, except as provided for in the following paragraph 2, shall deduct from the Income Tax or Property Tax an amount equal to the corresponding tax fraction, as the case may be, to the income received from the other Contracting State or to the property held in that other Contracting State.

2. Where a resident of a Contracting State obtains income which, in accordance with the provisions of articles 10, 11 and 12, may be taxed in the other Contracting State, the first State shall deduct from the income tax of that person an amount equal to the tax paid in the other Contracting State. However, this deduction may not exceed the part of the tax, calculated before the deduction, corresponding to the income obtained in the other Contracting State.

3. For the purpose of applying paragraph 2 of this article, where a total or partial exemption from taxes payable on interest on borrowings or loans, dividends and royalties, granted under the domestic law of one of the Contracting States applies, the other Contracting State shall deduct from the tax quota to be paid in that State, an amount equal to the tax to be paid in the State granting the exemption, if such exemption does not exist.

1. Nationals of one Contracting State shall not be subject in the other Contracting State to any taxes or obligations relating thereto which are not or are more burdensome than those to which nationals of the latter State who are under the same conditions are or may be subject.

2. The term ‘national’ means:

(a) all natural persons possessing the nationality of a Contracting State;

(b) all legal persons, companies of persons and associations established under the laws in force in a Contracting State.

3. A permanent establishment held by an undertaking of one Contracting State in the other Contracting State shall not be subject to taxation in that State in a less favourable manner than undertakings of the latter State carrying out the same activities.

This provision does not oblige a Contracting State to grant to residents of the other Contracting State the personal deductions, reliefs and tax reductions it grants to its own residents in view of their marital status or family burdens.

4. Undertakings of a Contracting State, whose capital is wholly or partly owned or controlled directly or indirectly by one or more residents of the other Contracting State, shall not be subject in the Contracting State referred to above to any tax or obligation relating thereto which is not or is more burdensome than those to which the like undertakings of the first Contracting State are or may be subject.

5. This Article applies to all taxes covered by this Convention.

1. Where a resident of a Contracting State considers that the measures taken by one or both Contracting States imply or may entail for him a charge that is not in conformity with this Convention, irrespective of the remedies provided for by the national law of the States, he may submit his case to the competent authority of the Contracting State of which he is a resident.

2. This competent authority, if it finds the claim well founded and if it is not in a position to adopt a satisfactory solution, shall make every effort to resolve the matter through an amicable agreement with the competent authority of the other Contracting State in order to avoid the imposition not in conformity with this Convention,

3. The competent authorities of the Contracting States shall endeavour to resolve difficulties by amicable agreement or to dispel doubts arising from the interpretation or application of this Convention. They may also agree to try to avoid double taxation in cases not provided for therein.

4. The competent authorities of the Contracting States may communicate directly with each other in order to achieve the agreements referred to in the preceding paragraphs. Where it is considered that such agreements can be facilitated by personal contacts, the exchange of views may take place within a committee composed of representatives of the competent authorities of both Contracting States,

The provisions of this Convention do not affect the tax privileges enjoyed by diplomatic or consular officials in accordance with the general principles of international law or under special agreements.

1. The competent authorities of the Contracting States shall exchange the information necessary for the application of this Convention and of the internal laws of the Contracting States relating to taxes covered by this Convention which are required in accordance with it. The information thus exchanged shall be kept secret and shall not be disclosed to any person or Authority which is not responsible for the settlement or collection of the taxes covered by this Agreement.

2. In no case does the provisions of paragraph 1 oblige a Contracting State to

(a) adopt administrative measures that are contrary to its legislation or administrative practice or those of the other Contracting State;

(b) to provide information that cannot be obtained on the basis of their own legislation or normal administrative practice or that of the other Contracting State:

(c) transmit information revealing a commercial, industrial, business or professional secret or a commercial or industrial procedure, to information whose communication is contrary to public policy.

1. This Convention shall be ratified and the instruments of ratification shall be exchanged in Madrid as soon as possible.

2. Once the instruments of ratification have been exchanged, the Convention will enter into force and its provisions will be applied for the first time.

(a) In Spain: for taxes payable from 1 January of the year following the year in which the instruments of ratification were exchanged;

(b) In Finland: for taxes levied on the tax year beginning on or after 1 January following the year in which the instruments of ratification were exchanged.

This Convention shall remain in force until it is denounced by one of the Contracting States. Any of them may report it through diplomatic channels, at least six months before the end of each calendar year. In such a case, the Convention shall cease to have effect:

(a) In Spain: for taxes payable from 1 January of the year following the year in which the complaint is made;

(b) In Finland: for taxes payable in the fiscal year beginning on or after 1 January following the year in which the complaint is made.

In faith, the appointed Plenipotentiaries have signed and sealed this Convention.

Done at Helsinki, in the Spanish and Finnish languages, in double copies, both texts being authenticated on 15 November 1967.

Therefore, having seen and examined the twenty-nine articles contained in that Convention, having heard the Committee on Treaties of the Spanish Courts, in compliance with article 14 of its Organic Law, I have come to approve and ratify what is provided for, as I hereby approve and ratify it, promising to comply with it, observe it and ensure that it is implemented and observed in a timely manner in all its parts, for the purpose of which, for its greater validity and firmness, I will issue this instrument of ratification signed by Me, duly sealed and endorsed by the undersigned Minister of Foreign Affairs.

Given in Madrid on July 11th, one thousand nine hundred and sixty-eight.

FRANCE FRANCE

The Foreign Minister.

FERNANDO MARY CASTIELLA AND MAIZ

The Exchange of Ratification Instruments was verified in Madrid on October 30, 1968.

What is made public for general knowledge.—The Ambassador Permanent Secretary General, Germán Burriel,