Netherlands

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

1. This Convention applies to income and property taxes payable by each State, its political subdivisions and local entities, whatever the system of its levy.

2. Income and property taxes are those which tax 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 or salaries paid by the Companies and taxes on capital gains.

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

(a) In the Netherlands:

– inkomstenbelasting (income tax),

– of loonbelasting (the wage tax),

– from vennootschapsbelasting (corporate tax),

– of splitbelasting (the dividend tax),

– of vermogensbelasting (the property tax) (hereinafter referred to as the ‘Dutch tax’);

(b) In Spain:

– the General Personal Income Tax;

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

– the following taxes on account: the Territorial Contribution on Rústica and Pecuaria Wealth, the Territorial Contribution on Urban Wealth, the Income Tax on Personal Work, the Income Tax on Capital and the Tax on Commercial and Industrial Activities and Benefits;

– in Sahara, income taxes (on labour and equity returns) and on business profits;

– the area fee, gross product tax and excise duty on profits, regulated by the Act of 26 December 1958 (applicable to undertakings engaged in the research and exploitation of hydrocarbons);

– local income and property taxes (hereinafter referred to as the Spanish tax).

4. The Convention shall also apply to any tax of an identical or similar nature which is added to or replaced by the present tax. The competent authorities of the Member States shall notify each other of any significant changes made to their respective tax laws.

1. This Convention, unless otherwise interpreted:

(a) The term ‘State’ means the Netherlands or Spain, as derived from the text; the term ‘States’ means the Netherlands and Spain;

(b) The term ‘Netherlands’ means the part of the Kingdom of the Netherlands which is situated in Europe;

(c) The term 'Spain' means the Spanish State and, when used geographically, peninsular Spain, the Balearic Islands and the Canary Islands, the Spanish squares and province in Africa;

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

(e) The term ‘Society’ means any legal person or entity that is considered a legal person for tax purposes;

(f) The terms ‘undertaking of one State’ and ‘undertaking of the other State’ mean, respectively, an Enterprise operated by a resident of one State and an Enterprise operated by a resident of the other State;

(g) ‘competent authority’ means:

1. In the Netherlands, the Minister of Finance or his duly authorized representative.

2. In Spain, the Minister of Finance, the Director General of Taxes or any other authority to which the Minister delegates.

2. For the purposes of the application of this Convention by a 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 State concerning the taxes which are the subject of this Convention.

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

2. For the purposes of this Convention, a natural person, who is a member of a diplomatic or consular mission of one of the States, in the other State or in a third State and who is a national of the sending State, shall be considered a resident of the sending State.

3. Where under the provisions of number 1, a natural person is resident in both States, the case shall be settled according to the following rules:

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

(b) If the State in which the 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 either State, he or she shall be considered a resident of the State in which he or she normally lives;

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

(d) If he or she is a national of either State or is not a national of either State, the competent authorities of the States shall decide the case by mutual agreement.

4. Where under the provisions of number 1, a person, excluding natural persons, is a resident of both States, he shall be considered a resident of the State in which his 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 Enterprise carries out all or part of its activity.

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

(a) Management 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 for a duration exceeding twelve months.

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

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

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

(c) The maintenance of a deposit of goods or goods belonging to the undertaking for the sole purpose of their processing by another Company;

(d) The maintenance of a fixed place of business for the sole purpose of buying goods or goods or collecting company-stop information;

(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 Enterprise itself.

4. A person acting in a State on behalf of an Enterprise of the other State, except in the case of an independent agent falling under number 5, is considered to constitute a permanent establishment in the State first mentioned if he has and habitually exercises in that State powers to conclude contracts on behalf of the Enterprise, unless his activities are limited to the purchase of goods or goods for the Enterprise.

5. An Enterprise of one State is not considered to have a permanent establishment in the other State merely because it carries out activities in that other State by means of 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 corporation resident of one State controls or is controlled by a corporation resident of the other State or that it engages in activities in that other State (whether by permanent establishment or otherwise) does not by itself render any of these companies permanent establishment of the other.

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

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

3. The provisions of No. 1 apply to income derived from the direct use, lease or any other form of exploitation of immovable property.

4. The provisions of points 1 and 3 also apply to income derived from the immovable property of undertakings and immovable property used for the pursuit of professional services.

1. The profits of an enterprise in one State may be taxed only in that State, 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 Enterprise may be taxed in the other State, but only to the extent that they can be attributed to the permanent establishment.

2. Where an Enterprise of one State carries out operations in the other State through a permanent establishment situated therein, in each State the profits it would obtain from the permanent establishment shall be attributed to the permanent establishment if it were a distinct and separate Enterprise carrying out the same or similar activities, under the same or similar conditions, and shall deal entirely independently with the Enterprise of which it is a permanent establishment.

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

4. No benefit shall be attributed to a permanent establishment merely because it buys goods or goods for the Enterprise.

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

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

2. Where the place of effective management of the Maritime Navigation Enterprise is on board a ship, that seat shall be deemed to be situated in the State where the base port of the ship is located, or, failing that, in the State in which the person operating the ship is resident.

When:

(a) An Enterprise of a participating State, directly or indirectly, in the direction, control or capital of an Enterprise of the other State; or

(b) The same persons participate, directly or indirectly, in the direction, control or capital of an Enterprise of one State and an Enterprise of the other State; and

In either case, the two Companies are, in their commercial or financial relations, bound by accepted or imposed conditions, which differ from those to be agreed by independent Companies, the profits that one of the Companies 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 this Company and may be subject to taxation accordingly.

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

2. However, such dividends may be subject to taxation in the State in which the company that pays the dividends resides and in accordance with the laws of that State, but the tax thus required may not exceed 15 per cent of the gross amount of dividends.

3. Notwithstanding the provisions of number 2:

a) The Dutch tax on dividends paid by a Dutch resident company to a company which is resident of Spain and whose capital is, in whole or in part, divided into shares shall not exceed 5 per 100 of the gross amount of dividends:

(1) If the company receiving the dividends holds 50 per cent or more of the capital of the company paying the dividends, or

2) If the company that receives the dividends owns 25 per 100 or more of the capital of the company that pays them provided that at least another company resident in Spain also owns 25 per 100 or more of the same capital.

(b) The Spanish tax on dividends paid by a company resident in Spain to a company resident in the Netherlands whose capital is wholly or partly divided into shares shall not exceed 10 per 100 of the gross amount of dividends:

(1) If the company receiving the dividends owns 50 per cent or more of the capital of the company paying the dividends; or

(2) If the company receiving the dividends holds 25 per 100 or more of the capital of the company paying the dividends, provided that at least one other company resident in the Netherlands also holds 25 per 100 or more of the same capital.

4. The provisions of Numbers 2 and 3 shall not affect the company's taxation of profits against which dividends are paid.

5. The term ‘dividends’ used in this Article includes the income from shares, shares or vouchers, parts of mines, founder cards or other rights allowing participation in profits, as well as income from other social participations assimilated to the income from shares by the tax legislation of the State in which the distribution company resides.

6. The provisions of Numbers 1, 2 and 3 do not apply if the dividend beneficiary, resident of one State, has in the other State of residence the Company 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.

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

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

2. However, these interests may be subject to taxation in the State of origin 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.

3. The term ‘interest’, used in this Article, covers the income from public debt, bonds or bonds with or without mortgage guarantee without the right to participate in profits, and from loans of any kind, as well as any income other than the tax legislation of the State from which the interest comes, assimilates the income from the amounts lent.

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

5. Interests are considered to come from a State when the debtor is the State itself, one of its political subdivisions, one of its local Entities or a resident thereof. However, where the debtor of interest, whether resident or not of a State, has in a State a permanent establishment in respect of which the debt giving rise to the interest has been incurred and this establishment supports the payment of the interest, the interest shall be deemed to have come from the State where 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 laws of each State, taking into account the other provisions of this Convention.

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

2. However, these fees may be subject to taxation in the State of origin and in accordance with the law of that State, but the tax thus required may not exceed 6 per 100 of the gross amount of the fees.

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. Amounts resulting from the disposal of the rights or property referred to in number 3 shall be subject to taxation only in the State of which the assignor is a resident.

5. The provisions of Nos 1, 2 and 4 do not apply if the beneficiary of the fees or amounts referred to in the previous number, resident of one State, has, in the other State from which the fees or amounts come, a permanent establishment with which the right or ownership for which such sums are paid is effectively linked. In this case, the provisions of article 7 apply.

6. The royalties are considered to come from a State where the debtor is the State itself, one of its political subdivisions, one of its local Entities or a resident thereof. However, where the debtor of the royalties is resident of a State or is not resident of a State, it has in a 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 come from the State where the permanent establishment is located.

7. Where, due to special relations between the debtor and the beneficiary of the royalties or between the two 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 State taking into account the other provisions of this Convention.

International organizations and their agencies and officials as well as members of consular or diplomatic missions of a third State, accredited in one State, are not entitled in the other State to the reductions or exemptions provided for in articles 10, 11 and 12 in respect of the income referred to in those articles and from that other State, if such income is not subject to taxation in the first State.

1. Gains from the disposal of immovable property, as defined in article 6 (2), may be taxed in the 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 State in the other State, or from movable property belonging to a fixed basis held by a resident of one State in the other State for the provision of professional services, including gains arising from the disposal of the permanent establishment (only or with the enterprise as a whole) or from the fixed base, may be taxed in that other State.

3. Notwithstanding the provisions of number 2, profits from the disposal of ships and aircraft operating in international traffic and movable property forming part thereof shall be subject to taxation only in the State where the effective head office of the enterprise is located. In this case, the provisions of Article 8(2) shall apply.

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

5. The provisions of number 4 shall not affect the rights of each State to tax, in accordance with its own law, the profits resulting from the disposal of shares or “enjoyments” of a Company whose capital is divided, in whole or in part, into shares and which is resident of that State, provided that the shares or “enjoyments” are held by a natural person who is resident of the other State if:

(a) is a national of the first State without being a national of the last State; and

(b) In the last five years prior to the sale of the shares or ‘enjoyments’ he has been resident of the first State; and

(c) During the same period he has owned, directly or indirectly, alone or with his wife and relatives in direct line and collateral to the second degree, at least one third, provided that he also owns, alone or with his wife, more than 7 per 100 of the nominal value of the paid-up share of the said Society.

1. Income earned by a resident of a 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 State for the pursuit of his or her activity. In the latter case, such income may be taxed in the other State, but only to the extent that it is attributable to the fixed base.

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

1. Without prejudice to the provisions of articles 17, 19, 20 and 21, salaries, wages and similar remuneration obtained by a resident of one State on account of employment may only be taxed in that State unless the employment is exercised in the other 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 No. 1, remuneration obtained by a resident of one State on account of employment in the other State may be subject to taxation in the former State only if:

(a) The employee does not remain in total in the other State, for 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 obtained by a resident of a State on the basis of employment on board a ship or aircraft in international traffic may only be subject to taxation in that State.

1. Assistance allowances and similar allowances which a resident of the Netherlands obtains as a member of a board of directors of a company resident of Spain may be taxed in Spain.

2. Remunerations and other remunerations which a resident of Spain obtains as ‘bestuurder’ or ‘commissaris’ of a company which is resident of the Netherlands may be taxed in the Netherlands.

Notwithstanding the provisions of Articles 15 and 16, rents earned by entertainment professionals, such as theatre, film, radio or television artists and musicians, as well as sportsmen, for their personal activities in this regard, may be subject to taxation in the State where they operate.

Without prejudice to the provisions of article 20 (1), pensions and other similar remuneration paid, in consideration of previous employment, to a resident of a State may only be subject to taxation in that State.

1. Remuneration included in pensions, paid directly or from funds constituted by a State, one of its political subdivisions or local entities to a natural person by virtue of services provided to that State or to these subdivisions or entities, may be subject to taxation in this State.

2. However, the provisions of articles 16, 17 and 19 apply to remuneration and pensions paid in the form of services rendered that relate to the pursuit of a commercial or industrial activity by one of the States or one of its political subdivisions or local entities.

The amounts which a Professor or Teacher resident of one State and who is in the other State for the purpose of teaching, for a period not exceeding two years, at a University, School or other educational establishment in the other State, which he receives for such activities, may only be subject to taxation in the State referred to in the first instance.

The amounts that a student or a trainees, who is or has previously been a resident of a State and who is in the other State for the sole purpose of continuing his or her studies or training, receives 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 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 (2), may be subject to taxation in the State in which the property is situated.

2. Property consisting of movable property forming part of the assets of a permanent establishment of an enterprise or of movable property belonging to a fixed base used for the pursuit of a liberal profession may be taxed in the State in which the permanent establishment or fixed base is situated.

3. Ships and aircraft engaged in international traffic and movable property affected by their operation may be subject to taxation only in the State where the effective headquarters of the Enterprise is located. For the purposes of this number, the provisions of Article 8 (2) shall apply.

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

1. In order to tax its residents, the Netherlands may include in the tax bases on which taxes, income or wealth are calculated which, in accordance with the rules of this Convention, may be taxed in Spain.

2. Without prejudice to the application of the rules of its legislation relating to the compensation of losses, the Netherlands shall, in order to avoid double taxation, deduct from the tax calculated in accordance with the first paragraph of this Article the part thereof corresponding to the proportion to which, in respect of the income or total assets which constitute the tax base referred to in that number, are the parts of income or wealth which have been included in the said tax base and which may be taxed in Spain in accordance with Articles 6, 7, 10, number 6; 11, number 4; 12, number 5; 14, numbers 1 and 2; 15, 16, number 1; 17, number 1; 18, 20 and 24, numbers 1 and 2, of this Convention.

In addition, the Netherlands shall make a deduction from the Dutch tax on income which may be taxed in Spain in accordance with Articles 10(2), 11, 2(2) and 12, 2(2) and which shall be included in the tax bases referred to in Article 10(1) of this Article. The amount of this deduction shall be the smallest of the following amounts:

(a) An amount equal to the Spanish tax.

(b) The part of the Dutch tax which, in respect of the tax calculated in accordance with the number 1 of this Article, is in the same proportion as the said parts of income are on the total income which constitutes the tax base to which that number refers.

3. Where a resident of Spain obtains income or owns property which, in accordance with the provisions of this Agreement, may be taxed in the Netherlands, Spain, except as provided for in number 4, he shall exempt from the tax such income or property, but in order to calculate the tax corresponding to the remaining income or property of this resident he may apply the same tax rate which would correspond if the said income or property had not been exempted.

4. Where a resident of Spain obtains income which, in accordance with the provisions of Articles 10, 2 and 3; 11, 2 and 12, 2 may be taxed in the Netherlands and are not exempt from Spanish tax, Spain shall deduct from the income tax of that resident an amount equal to the tax paid in the Netherlands. However, this deduction may not exceed the part of the tax corresponding to the income obtained from the Netherlands, calculated before the deduction.

The tax paid in the Netherlands will also be deducted from the Spanish account taxes, in accordance with the above provisions.

5. If under Spanish law the losses suffered by the permanent establishment of an Enterprise located in the Netherlands have been effectively deducted from the profits of this Company for the purpose of determining its tax in Spain, the exemption provided for in number 3 shall not apply to the profits from other tax years attributable to this permanent establishment to the extent that such profits have also been exempted from taxes in the Netherlands in any tax period due to the deduction of such losses from such profits.

1. Nationals of one State, whether or not they are residents of that State, shall not be subject to any tax or obligation in the other State relating thereto that is not required or more burdensome than those to which nationals of that State who are or may be subject under the same conditions are subject.

2. The term ‘national’ means:

(a) All natural persons possessing the nationality of a State.

(b) All legal persons, companies of persons and associations constituted under the laws in force in a State.

3. A permanent establishment which an Enterprise of one State has in the other State shall not be subject to taxation in that State in a less favourable manner than the Enterprises of the latter State carrying out the same activities.

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

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

5. The term ‘tax’ in this Article refers to taxes of any kind or name.

1. Where a resident of a State considers that the measures taken by one or both 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 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 itself, shall make every effort to resolve the matter by amicable agreement with the competent authority of the other State, in order to avoid the imposition not in conformity with this Convention.

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

4. The competent authorities of the States may communicate directly with each other in order to reach the agreements referred to in the above numbers.

1. The competent authorities of the States shall exchange the information (where such information is available to the authorities) necessary for the implementation of this Convention. 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. Under no circumstances do the provisions of number 1 require a State to:

(a) To take administrative measures contrary to its legislation or administrative practice or those of the other State.

(b) Provide information that cannot be obtained on the basis of its own legislation or normal administrative practice or that of the other State.

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

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 States shall agree by mutual agreement on the manner of application of Article 10, points 2 and 3, and Article 11, point 2.

2. The competent authorities of each State, in accordance with their respective uses, may lay down rules necessary for the implementation of the other provisions of this Convention.

1. This Convention may be applied in its present form or with the necessary amendments in any of the countries of Suriname or the Netherlands Antilles, if any of those countries imposes taxes of a similar nature to those to which this Convention applies. Such an extension shall take effect from the date and with the modifications and conditions, including those relating to its termination, to be agreed upon by mutual agreement for the exchange of diplomatic notes.

2. Unless another resolution is taken, the termination of the Convention shall not terminate the application of the Convention to any of the countries to which it has extended, in accordance with the provisions of this Article.

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

2. This Convention shall enter into force on the basis of the exchange of instruments of ratification, and with the exception of the provisions of number 3, its provisions shall apply to fiscal years and periods beginning on 1 January or after this day of the following year in which the exchange takes place.

3. The provisions of this Convention relating to dividends, interest and royalties shall apply in respect of dividends, interest and royalties paid after 30 days from the date of the exchange of instruments of ratification.

This Convention shall remain in force until it is denounced by any State. Any State may denounce the Convention by communicating it through diplomatic channels at least six months in advance before the end of each calendar year starting in 1975. In this case, the Convention shall cease to apply for fiscal years and periods beginning from the end of the calendar year in which the complaint has been notified.

In testimony to which the Plenipotentiaries, duly authorized by their respective Governments, have signed and sealed this Convention.

Done in duplicate in Madrid at 16 June of a thousand nine hundred and seventy-one in English, Dutch and Spanish. In the event of divergence on interpretation, the English text will bear witness.

[heading] PROTOCOL

At the time of the signing of the Convention, in order to avoid double taxation on income and property taxes, signed on this day between the Government of the Spanish State and the Government of the Kingdom of the Netherlands, duly authorized signatories have agreed on the following provisions which form part of the Convention.

I. Where in one State the income of a group of persons, such as a Society of Persons or an undivided inheritance, is considered as income of the Entity, while in the other State such income is considered as income of the persons participating in the group, the competent authorities of the States shall resolve the difficulties by mutual agreement.

II. Ad. to article 2

It is understood that the term ‘taxes on total salaries and salaries’ does not include social security contributions.

III. Ad. to article 2, paragraph 3 (b)

It is understood that the Spanish 'residence estate' is included in local income and property taxes.

IV. Ad. to article 3, number 1, (a) and (b)

1. The term ‘Netherlands’ also covers the part of the seabed and the subsoil of the North Sea, over which the Kingdom of the Netherlands has sovereign rights under international law.

2. The term ‘Spain’ also includes any area adjacent to the territorial sea of Spain, in which, in accordance with international law, it is or may be designated, in accordance with Spanish laws relating to the continental shelf, as an area in which Spain can exercise its rights on the seabed and the subsoil thereof for the exploitation of its natural resources.

V. Ad. to article 4

The provisions of Article 4(2) shall not apply to honorary consuls.

VI. Ad. to articles 10, 11 and 12

Notwithstanding the provisions contrary to the national laws of any of the States, the refund of the tax required in accordance with Articles 10, 11 and 12 shall be granted if the corresponding request is submitted to the competent authority of the State which has demanded the tax within two years of the end of the calendar year in which the tax was required.

VII. Ad. to article 10

Notwithstanding the provisions of Article 10(3)(b), the Spanish tax on dividends referred to in this point shall not exceed 5 per 100 of the gross amount of dividends if the company receiving them is not required to tax companies in the Netherlands for the same dividends.

VIII. Ad. to article 10

The provisions of Article 10 shall also apply to the income of eligible bonds or bonds.

IX. Ad. to article 11

Where an Enterprise of one State has a permanent establishment in the other State, the latter State may not impose any tax on the interest paid by the Enterprise to persons who are not residents of the latter State, unless the debt giving rise to the interest is related to this permanent establishment and such interest is supported by the same establishment.

X. Ad. to article 12

The provisions of article 12 (4) shall not apply if the sale of the rights or property has taken place on condition that the buyer is obliged to resell the rights or property.

XI. Ad. Article 20

For the purposes of Article 20, the Spanish autonomous bodies, such as the ‘High Council for Scientific Research’ and the ‘Spanish Foreign Currency Institute’, are assimilated to the Spanish State, the political subdivisions or the local authorities of Spain.

XII. Ad. to article 25

With regard to income tax or company tax, it is understood that the bases referred to in Article 25(1) are 'onzuivere inkomen' or 'winst', as defined in the Dutch law on income tax or corporate tax, respectively.

XIII. Ad. to article 25

For the purposes of Article 25(2)(a), second paragraph, interest arising from loans contracted after 1 January 1968 for which a reduction in Spanish tax has been granted under Decree-Law No 19/1961 of 19 October, as regulated on 1 January 1968, shall be deemed to have borne the Spanish tax under the conditions laid down in Article 11(2).

XIV. Ad. to articles 12 and 25

1. By way of derogation from Article 12, paragraph 2, and Article 25, paragraph 2, point (a), the following provisions shall apply to royalties from Spain and paid to a resident of the Netherlands under a contract concluded within the period of five years from the date on which the Convention applies to royalties:

(a) The rate of tax required by Spain shall not exceed 5 per 100 of the gross amount of the fees.

(b) In accordance with the provisions of point (b) of the second paragraph of Article 25, the Netherlands shall deduct, in addition to the tax required by Spain, an amount equal to 5 per 100 of the gross amount of such fees, taking into account that the provisions of points (a) and (b) of that number shall apply only for a period of five years from the date on which the contract has been concluded.

2. The provisions of number 1 shall not apply to payments of any kind paid for the use or granting of copyright on literary, artistic or scientific works, including film.

XV. Ad. to article 28

The competent authorities are not obliged to provide information of a general nature.

XVI. Ad. to article 28

The obligation to exchange information does not include information obtained from banks or similar institutions. The term ‘like institutions’ includes, inter alia, Insurance Companies.

XVII. Ad. Article 32

By way of derogation from Article 32(2), the provisions of Articles 8, 14, 3 and 24, 3 shall apply to the following calendar year 1965.

Done in duplicate in Madrid at 16 June of a thousand nine hundred and seventy-one in English, Dutch and Spanish. In the event of a divergence of interpretation, the English text will bear witness.

Therefore, having seen and examined the thirty-three articles that make up that Convention and the seventeen of its annexed Protocol, having heard the Committee on Foreign Affairs of the Spanish Courts, in compliance with the provisions of article 14 of its Organic Law, I 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 complied with and observed in a timely manner in all its parts, for the purpose of which, for further validation and firmness, I order issue this instrument of ratification signed by Me, duly sealed and endorsed by the undersigned Minister for Foreign Affairs.

Given in Madrid on June 15th of a thousand nine hundred and seventy-two.

FRANCE FRANCE

The Minister for Foreign Affairs,

GREGORIO LOPEZ BRAVO DE CASTRO

This Convention entered into force on 20 September 1972, in accordance with Article 32 thereof.

What is made public for general knowledge.

[ignore]Madrid, September 30, 1972.–The Technical Secretary General of the Ministry of Foreign Affairs, Enrique Thomas de Carranza.