United Kingdom

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

1. The taxes covered by this Convention are:

(a) In the United Kingdom of Great Britain and Northern Ireland:

(i) Income tax;

(ii) corporation tax; and

(iii) the capital gains tax;

(hereinafter referred to as the ‘United Kingdom tax’);

(b) in Spain:

(i) General income tax on natural persons;

(ii) General income tax for corporations and other legal entities;

(iii) The following taxes on account: the Territorial Contribution on Rustic and Pecuaria Wealth, the Territorial Contribution on Urban Wealth, the Income Tax on Personal Work, the Capital Income Tax and the Tax on Commercial and Industrial Activities and Benefits;

(iv) in Sahara, income taxes, income from work and wealth and profits from enterprises;

(v) the area fee and profit tax, regulated by the Act of 27 June 1974, applicable to undertakings engaged in the investigation and exploitation of hydrocarbons; and

(vi) Local taxes on income and wealth;

(hereinafter referred to as ‘the Spanish tax’).

2. This Convention shall also apply to future taxes of an identical or similar nature which one or another Contracting State adds to or replaces the current taxes upon signature of this Convention. At the end of each year, the competent authorities of the Contracting States shall notify each other of any relevant amendments to their respective tax laws.

1. This Convention, unless otherwise interpreted:

(a) The term ‘United Kingdom’ means Great Britain and Northern Ireland, including any area outside the territorial sea of the United Kingdom which, under international law, has been or may henceforth be designated under United Kingdom laws relating to the Continental Shelf, as an area in which the rights of the United Kingdom with respect to the seabed and subsoil and its natural resources may be exercised.

(b) The term ‘Spain’ means the Spanish State and, geographically speaking, Peninsular Spain, the Balearic Islands and the Canary Islands, the Spanish cities and territories of Africa, including any area outside the territorial sea of Spain which, in accordance with international law, has been or may henceforth be identified under Spanish laws relating to the Continental Shelf, as an area in which the rights of Spain with regard to the seabed and subsoil and its natural resources can be exercised.

(c) The term ‘nationals’ means:

(i) in respect of the United Kingdom, any citizen of the United Kingdom and of the colonies who derives his status as a result of his connection with the United Kingdom and all legal persons, associations and other entities deriving his status as such from the laws in force in the United Kingdom;

(ii) in relation to Spain, all natural persons possessing Spanish nationality and all legal persons, companies or associations that have such status under the laws in force in Spain;

(d) “International traffic” means any carriage by ship or aircraft by an undertaking of one Contracting State, except where it is carried out only between points of the other Contracting State;

(e) The words ‘one Contracting State’ and ‘the other Contracting State’ mean Spain or the United Kingdom, as derived from the text;

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

(g) the term ‘company’ means any legal person or any entity to be regarded as a legal person for tax purposes;

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

(i) The term ‘competent authority’ means, in the case of Spain, the Minister of Finance, the Technical Secretary General or any other authority to which the Minister delegates and, in the case of the United Kingdom, two Internal Revenue Commissioners or their authorised representatives.

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 taxes which are the subject of this Convention.

1. For the purposes of this Convention, the term “resident of a Contracting State” means, subject to the provisions of paragraphs 2 and 3 of this article, 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; but the term does not include a person subject to taxation in that Contracting State only in respect of income derived from that Contracting State. The words ‘resident of Spain’ and ‘resident of the United Kingdom’ shall therefore be interpreted in this way.

2. Where, under the provisions of paragraph 1 of this article, a natural person is resident in both Contracting States, his residence shall be determined in accordance with the following rules:

(a) This person shall be considered a resident of the Contracting State where he or she has permanent housing at his or her disposal; if he or she has permanent housing at his or her disposal in both Contracting States, he or she shall be considered a resident of the Contracting State with which he or she has 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 either Contracting State or is not 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 of this article, 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) a head office;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop;

(f) a mine, oil well, quarry or any other place of extraction of natural resources;

(g) construction or assembly work 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 or goods belonging to the undertaking;

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

(c) the use of a deposit of goods or goods belonging to the undertaking for the sole purpose of processing by another undertaking;

(d) the use of a fixed place of business for the sole purpose of purchasing goods or 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 to the undertaking.

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) of this article, is deemed to constitute a permanent establishment in the Contracting State first mentioned, if he has and habitually exercises in that Contracting State the power to conclude contracts on behalf of the undertaking, unless his activities are limited to the purchase of goods or goods for the enterprise.

5. An enterprise of one Contracting State is not considered to have a permanent establishment in the other 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 such persons act within the ordinary framework of their activity.

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

1. Income from immovable property, including from agricultural and forestry holdings, may be taxed in the Contracting State in which such property is situated.

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

3. The provisions of paragraph 1 of this article 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 of this article also apply to income derived from the immovable property of an enterprise and from immovable property used for the provision 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. Without prejudice to the provisions of paragraph 3 of this article, when an enterprise 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 identical 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 Contracting State in which the permanent establishment is situated or elsewhere.

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

5. For the purposes of the preceding paragraphs, the benefits to be attributed to the permanent establishment shall be determined on the same basis every year, unless there are sufficient reasons to proceed otherwise.

6. 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 Convention.

1. A resident of one Contracting State shall not be subject to taxation in the other Contracting State on the basis of profits derived from the operation of ships or aircraft other than those derived from traffic between points located in the other Contracting State.

2. The provisions of paragraph 1 shall also apply to profits obtained through participation in a pool, on a joint holding or on an international organisation operating maritime or air navigation.

When:

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

(b) the same persons participate, directly or indirectly, in the direction, control or capital of an Enterprise of one Contracting State and of an Enterprise of the other Contracting State, and in either case, the two Enterprises are, in their commercial or financial relations, bound by accepted or imposed conditions, which differ from those agreed upon by independent Enterprises, the profits which one of the Enterprises would have obtained in the absence of such conditions, and which in fact have not occurred because of them, may be included in the profits of this Enterprise and subject to taxation accordingly.

1. Dividends paid by a company resident in Spain to a resident of the United Kingdom may be taxed in the United Kingdom. These dividends may also be taxed in Spain, and in accordance with Spanish law, but being the actual beneficiary of these dividends resident in the United Kingdom, the tax thus required may not exceed:

(a) 10 per cent of the gross amount of dividends if the beneficiary is a Company which holds, directly or indirectly, 10 per 100 or more of the voting rights in the Company which pays the dividends;

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

2. Dividends paid by a UK resident company to a resident of Spain may be taxed in Spain. These dividends may also be taxed in the United Kingdom, and in accordance with United Kingdom law, but being the actual beneficiary of these dividends resident in Spain, the tax thus required may not exceed:

(a) 10 per cent of the gross amount of dividends if the beneficiary is a Company which holds directly or indirectly 10 per 100 or more of the voting rights in the Company which pays the dividends;

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

3. However, as long as a natural person resident in the United Kingdom is entitled to a tax claim in respect of dividends paid by a company resident in the United Kingdom, they shall apply in place of the provisions of paragraph 2 of this Article, as set out below:

(a) (i) Dividends paid by a company that is resident of the United Kingdom to a resident of Spain may be taxed in Spain.

(ii) Where a resident of Spain is entitled to a tax claim in respect of that dividend, in accordance with subparagraph (b) of this paragraph, the sum of that dividend plus the corresponding tax claim may be taxed in the United Kingdom and, in accordance with the law of that State, at a rate not exceeding 15 per 100.

(iii) Except as provided in subparagraph (a)(ii) of this subparagraph, dividends paid by a United Kingdom resident company, and whose beneficial owner is resident of Spain, shall not be subject to any tax on such dividends in the United Kingdom.

(b) A resident of Spain who receives dividends from a United Kingdom resident company shall be entitled, without prejudice to subparagraph (c) of this subparagraph and provided that he is a beneficial owner of the dividends, to the tax credit to an extent equivalent to that enjoyed by a natural person resident of the United Kingdom who would have received such dividends and therefore to the repayment of any excess of such credit on his tax debt in the United Kingdom.

(c) The provisions of subparagraph (b) of this paragraph do not apply where the beneficial owner of the dividends is a corporation which, either alone or together with one or more associated entities, holds directly or indirectly 10 per 100 or more of the voting rights of the corporation that pays the dividends. For the purposes of this paragraph, two Entities are considered to be associated when one possesses directly or indirectly more than 50 per cent of the right to vote in the other, or a third Corporation holds more than 50 per 100 of the right to vote in the first two.

4. The term ‘dividends’ used in this Article includes the income from shares or other rights, except credit rights, which allow the participation of profits, as well as income from other social participations assimilated to the income from shares by the tax law of the State in which the distribution company resides, and also includes any other concept (other than interest whose tax is reduced in accordance with Article 11 of this Convention) which, according to the law of the Contracting State in which the company that pays the dividend, is considered to be a dividend or distribution of profits of a corporation.

5. The provisions of paragraph 1 or, where applicable, paragraphs 2 and 3 of this article, do not apply where the resident of one of the Contracting States has a permanent establishment in the other Contracting State and the shares or shares generated by the dividends are indeed linked to that permanent establishment. In this case, the provisions of Article 7 apply.

6. If the beneficial owner of a dividend, resident of a Contracting State, holds 10 per 100 or more of the class of shares to which the dividend is paid, paragraph 1 or paragraphs 2 and 3 of this article shall not apply, to the extent that the dividend may have been paid exclusively from profits or income received by the paying company, within a period ending twelve or more months prior to the date of acquisition. For the purposes of this paragraph, the term ‘date of acquisition’ refers to the day when the beneficial owner of the dividend became the owner of 10 per 100 or more of the class of shares to which the return is paid.

However, this paragraph does not apply if the beneficial owner of the dividend proves that he acquired the shares for reasons of good commercial faith and not for the primary purpose of obtaining the profits to which the application of this article entitles.

7. Where a Company resident of one Contracting State obtains profits or income from the other Contracting State, that other State may not subject to any taxation on dividends paid by the Company and the beneficial owners of which are not persons resident of that other State, or subject the undistributed profits of the Society 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. Notwithstanding the above, provided that a Company resident of one Contracting State has a permanent establishment in the other Contracting State, it may be subject to any tax retained at the source established by the domestic law of that other Contracting State, but such tax shall not exceed 15 per 100 of the distributed profits of the Society attributable to the establishment, which may not naturally be included as a distributed benefit of the Corporation Tax.

1. Interest from one Contracting State, and the beneficial owner of which is a resident of the other Contracting State, may be taxed in that other State.

2. However, these interests may be taxed 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 12 per 100 of the gross amount of interest.

3. The term ‘interest’ used in this Article includes the income from public debt and bonds and bonds, with or without mortgage guarantee and entitled or not to participate in profits, and other claims of any kind, as well as all other income, assimilated to that derived from loans, by the tax legislation of the State from which the income comes.

4. The provisions of paragraphs 1 and 2 of this article do not apply if the beneficial owner of the interest, resident of one Contracting State, exercises in the other Contracting State from which the interest is derived, a trade or business through a permanent establishment located in it, or provides in that other State professional services on a fixed basis and the credit generated by the interest is effectively linked to such permanent establishment or fixed base. In this case, the provisions of Article 7 or Article 14 shall apply as appropriate.

5. Interest is considered to come from a Contracting State when the debtor is the State itself, one of its political subdivisions or local corporations or a resident of that State. However, where the debtor of interest, whether or not 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 payment of the interest, the interest shall be deemed to have come from the Contracting State where the permanent establishment is located.

6. Any legal provision of one Contracting State under which interest paid by one Company to another is considered as a dividend or distribution, which is not deductible as an expense when calculating profits subject to taxation by the Paying Company, shall not apply when interest is paid to a Company resident of the other Contracting State which is its effective beneficiary. This rule shall not apply where more than 50 per cent of the right to vote of the Company recently mentioned is owned, directly or indirectly, by residents of the State mentioned above.

7. The tax limitation set out in paragraph 2 of this article shall not apply to interest on receivables transferred on the securities market where the beneficial owner of the interest:

(a) is not subject to taxation in respect of such interests in the Contracting State of which it is resident; and

(b) assigns or undertakes to assign the credit from which such interest originates, within three months of the date on which the beneficial owner acquired it.

8. Where due to special relations between the debtor and the beneficial owner of the interest, or between the two and any other person, the amount of interest paid, taking into account the claim for which it is paid, exceeds the amount that would have been agreed by the debtor and the beneficial owner 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.

9. The provisions of this article do not apply if the claim for which the interest is paid was created or ceded for the primary purpose of obtaining the benefits contained in this article and not for reasons of good commercial faith.

1. Fees from one Contracting State, and the beneficial owner of which is a resident of the other Contracting State, may be subject to taxation in that other State.

2. However, these fees 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 gross amount of the fees.

3. The term ‘royalties’ used in this article includes quantities of any kind paid for the use or grant of copyright on literary, artistic or scientific works (including film, film or tape recording of television or radio programmes), patents, factory or trade marks, designs, drawings, formulas or secret procedures, as well as for the use or granting of use of industrial, commercial or scientific equipment and for information relating to industrial, commercial or scientific experience.

4. The provisions of paragraphs 1 and 2 of this article do not apply if the beneficial owner of the royalties, resident of one Contracting State, exercises in the other Contracting State from which the royalties are due a trade or business through a permanent establishment, or provides in that other State professional services on a fixed basis, and the right or ownership for which the royalties are paid is effectively linked to that permanent establishment or fixed base. In this case, the provisions of article 7 or article 14, as appropriate, apply.

5. Royalties are considered to come from a Contracting State where the debtor is the State itself, one of its political subdivisions or local corporations or a resident of that State. However, where the debtor of the royalties is a resident of a Contracting State or not, it has a permanent establishment in a Contracting State to which the obligation to pay the royalties 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 beneficial owner of the royalties, or between the two and any other person, the amount of the royalties paid, in view of the use, right or information 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 subject to taxation, in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.

7. The provisions of this article do not apply if the right or property generated by the royalties were created or granted for the primary purpose of obtaining the benefits of this article, and not for reasons of good commercial faith.

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 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 paragraph 2 of this article, profits obtained by a resident of a Contracting State from the alienation of ships or aircraft used in international traffic and from movable property affected by the operation of such ships and aircraft may be subject to taxation only in that Contracting State.

4. Profits arising from the disposal of any property other than those referred to in paragraphs 1, 2 and 3 of this article may be taxed only in the Contracting State of which the transferor is resident.

1. Income earned by a resident of a Contracting State for the provision of professional services or other independent activities of a similar nature may only be taxed in that State unless it regularly has a fixed basis in the other Contracting State for the conduct of its activities. If it has such a fixed base, income may be taxed in the other Contracting State, but only to the extent that it can be attributable to that fixed base.

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

1. Without prejudice to the provisions of articles 16, 18, 19 and 21, salaries, wages and similar remuneration obtained by a resident of a Contracting State on account of employment may be subject to taxation only in that State, 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 of this article, remuneration obtained by a resident of a Contracting State on the basis of employment in the other Contracting State may be subject to taxation in the first State only if:

(a) The recipient remains in the other State for one or more periods not exceeding a total of one hundred and eighty-three days in the course of the fiscal year of that other State; and

(b) remuneration is paid by, or on behalf of, an entrepreneur who is not a resident of the other State; and

(c) Remuneration is not paid from a permanent establishment or a fixed basis which the enterprise or professional has in the other State.

3. Notwithstanding the foregoing provisions of this article, remunerations earned on account of employment on board a ship or aircraft in international traffic may be taxed in the Contracting State of which the person who obtains the profits from the operation of the ship or aircraft is resident.

1. The shares of Councillors and other similar remunerations which a resident of a Contracting State obtains as a member of a Board of Directors of a company resident of the other Contracting State may be taxed in that other State.

1. Notwithstanding the provisions of Articles 14 and 15, the rents earned by performing professionals, such as theatre, cinema, radio and television artists and musicians, as well as by sportsmen, for their personal activities in this regard, may be subject to taxation in the Contracting State in which they operate.

2. Where the income relating to the personal activities of one of these professionals of the spectacle or sportsman is charged not to that professional or sportsman, but to another person brought forward, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be subject to taxation in the Contracting State in which the activities of the spectacle professional or the sportsman take place.

1. Without prejudice to the provisions of article 19, pensions and other similar remuneration paid in consideration of employment passed to a resident of a Contracting State, as well as annuities paid to that resident, may only be taxed in that State.

2. The term 'annuality' means a prefixed sum to be paid periodically in times established throughout a person's life or for a specified or determinable period of time in exchange for payment of an appropriately equivalent amount in money or sign representing it.

1. Remuneration, excluding pensions, paid to a natural person from the public funds of the United Kingdom or Northern Ireland, or to the funds of any local authority of the United Kingdom, in consideration of services provided to the Government of the United Kingdom or Northern Ireland, or to a local authority of the United Kingdom, may be taxed only in the United Kingdom. However, such remuneration may only be taxed in Spain if the services are provided in Spain and the beneficiary is a resident of Spain who:

(a) possesses Spanish nationality; or

(b) has not acquired the status of resident of Spain for the sole purpose of providing those services.

2. Remuneration, excluding pensions, paid to a natural person by the Spanish State, one of its political subdivisions or local corporations, in consideration of services provided to the State to one of its political subdivisions or local authorities, may only be subject to taxation in Spain. However, such remuneration may only be taxed in the United Kingdom if the services are provided in the United Kingdom and the beneficiary is a resident of the United Kingdom who:

(a) possesses the nationality of the United Kingdom; or

(b) has not acquired the status of resident of the United Kingdom for the sole purpose of providing such services.

3. Pensions paid to a natural person by, or from funds created by, the United Kingdom or Northern Ireland, or by a local authority in the United Kingdom, in consideration of services provided to the Government of the United Kingdom, or to Northern Ireland, or to a local authority in the United Kingdom, may only be taxed in the United Kingdom. However, these pensions can only be taxed in Spain if the beneficiary is a national and resident of Spain.

4. Pensions paid to a natural person by, or from funds created by, the Spanish State, one of its political subdivisions or local authorities, to a natural person in consideration for services provided to Spain, to one of its political subdivisions or local corporations, may only be subject to taxation in Spain. However, these pensions can only be taxed in the United Kingdom if the beneficiary is a national and resident of the United Kingdom.

5. The provisions of Articles 15, 16 and 18 apply to remuneration and pensions paid in consideration of services rendered in the course of a commercial or industrial activity exercised by a Contracting State (including in the case of the United Kingdom those exercised by the Government of Northern Ireland), or one of its political subdivisions or local corporations.

1. A student or a trainees who is or was immediately prior to his visit to a Contracting State resident of the other Contracting State, and who visits the first Contracting State for the sole purpose of continuing his studies or training, shall not be subject to taxation in the first Contracting State in respect of the sums he receives for his support, studies or training, provided that such payments come from outside that State.

1. A natural person who, at the invitation of a university, institution of higher education, school or other similar educational institution, recognized in one of the Contracting States, visits that Contracting State for the sole purpose of teaching in that educational institution for a period not exceeding two years, and who is or was in the period immediately preceding his resident visit from the other Contracting State, shall not be subject to taxation in that first Contracting State in respect of the remuneration they receive as a result of such educational activity.

1. The income of a resident of a Contracting State, whatever its nature or origin and which has not been expressly mentioned in the previous articles of this Convention, may only be taxed in that State.

2. The provisions of paragraph 1 of this article do not apply if the beneficiary of the rents, resident of one Contracting State, conducts business in the other Contracting State through a permanent establishment situated therein or provides professional services in that other State on a fixed basis, and the right or property in respect of which the income is paid is effectively linked to the said permanent establishment or fixed base. In this case, the provisions of article 7 or article 14, as appropriate, apply.

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. Capital represented by movable property forming part of the assets of a permanent establishment of an Enterprise, or by movable property belonging to a fixed base used for the provision of professional services, may be taxed in the Contracting State in which the permanent establishment or fixed base is located.

3. Without prejudice to the provisions of paragraph 2 of this article, ships and aircraft operated in international traffic and movable property affected by their operation shall be subject to taxation only in the Contracting State of which the employer is a resident.

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

1. Without prejudice to the provisions of the United Kingdom's legislation in respect of the deduction, as a claim against the United Kingdom tax, of any tax levied abroad and not affecting that general principle:

(a) The Spanish tax payable under Spanish law, and in accordance with this Agreement, either directly or by withholding, on profits, income or profits subject to taxation and coming from Spain (excluding in the case of dividends the tax on profits from which the dividend is paid), shall be deducted, as a credit, from any United Kingdom tax based on the same profits, income or profits on which the Spanish tax was calculated.

(b) In the case of a dividend paid by a company resident in Spain to a company resident in the United Kingdom, and having directly or indirectly 10 per 100 or more of the voting rights in the Company that pays the dividend, the credit deduction shall take into account the Spanish tax that has been required of the company in respect of the profits from which the dividend is paid, in addition to any Spanish tax deductible under the provisions of subparagraph (a) of this subparagraph.

2. In the case of Spain:

(a) Where a resident of Spain obtains income which, in accordance with the provisions of this Agreement, may be taxed in the United Kingdom, Spain shall deduct from the income tax of that person an amount equal to that of the tax paid in the United Kingdom; however, that deduction may not exceed that part of the tax calculated before the deduction, which corresponds to the income obtained in the United Kingdom, was made. The tax paid in the United Kingdom will also be deducted from Spanish taxes on account of general income, in accordance with the provisions of this paragraph.

(b) Where dividends from a company resident in Spain are included in the profits of a company resident in the United Kingdom, the first company is entitled to the same deduction that would have been applied if both companies had been resident in Spain.

(c) If a company resident in the United Kingdom pays dividends to a company resident in Spain, in respect of which, in accordance with the provisions of article 10, paragraph 3 (c), the company recently mentioned is not entitled to the tax claim referred to in subparagraph (b) of that subparagraph, it shall be considered, for the purposes of this paragraph, that those dividends have been taxed in the United Kingdom for an amount equal to fifteen eighty-five votes of their amount.

3. For the purposes of paragraph 1 of this Article, the expression ‘Spanish tax chargeable’ is considered to include any amount that has been required as a Spanish tax in any financial year if no reduction in the tax accrued on that financial year or part thereof has been applied by virtue of:

(a) article 20, paragraph (2A), or article 21 of Decree 3357/1967 of 23 December, as long as they are in force and have not been amended since the date of signature of this Convention or, if applicable, have been so only in secondary respects which do not affect its general character; or

(b) any other provision which may be adapted in the future by granting an exemption or reduction from the tax, which the competent authorities of the Contracting States agree is of a substantially similar nature, as long as it has not been subsequently amended or, if so, only in secondary respects which do not affect its general character.

Whenever:

(i) In determining the amount to be required as a Spanish tax referred to in this paragraph, account is taken of the provisions of article 11, paragraph 2, and article 12, paragraph 2; and

(ii) the UK tax deduction is not granted under this paragraph in respect of income from any source, if that income originates after ten years have elapsed since the application of the Spanish tax exemption or reduction from that source's income.

4. For the purposes of paragraphs 1 and 2 of this article, profits, income and capital gains whose beneficial owner is a resident of a Contracting State, and which may be taxed in the other Contracting State in accordance with this Convention, shall be deemed to have come from sources based in that other Contracting State.

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 the nationals of the latter State are or may be subject and which are in the same conditions.

2. Stateless persons resident in a Contracting State shall not be subject in any Contracting State to any tax or obligation relating thereto which is not or is more burdensome than those to which the nationals of the State concerned are or may be subject, and which are in the same conditions.

3. Without prejudice to the provisions of article 10, paragraph 7, a permanent establishment held by an enterprise 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.

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 may not be interpreted as obliging a Contracting State to grant to natural persons who are not residents of that State the personal bonuses, deductions and tax reductions granted to natural persons who are residents.

6. In this Article the term ‘tax’ includes all taxes, whatever their nature and name.

1. Where a resident of a Contracting State considers that the measures taken by one or both Contracting States involve or may entail a charge for him that is not in conformity with this Convention, he may, irrespective of the remedies provided for by the national law of the States, 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 itself, shall endeavour to resolve the matter in 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 by mutual agreement any difficulties or doubts arising from the interpretation or application of this Convention.

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.

1. The competent authorities of the Contracting States shall exchange the information necessary for the application of the provisions of this Convention, either to prevent fraud or for the application of the relevant provisions against fraud of law in relation to taxes covered by this Convention. The information thus exchanged shall be kept secret and shall not be disclosed to any person (including the Tribunals and administrative bodies) who is not responsible for the settlement or collection, procedures or claims relating to the taxes covered by this Agreement.

2. The provisions of paragraph 1 cannot under any circumstances be interpreted as imposing on the competent authority of either Contracting State the obligation:

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

(b) transmit information which they cannot obtain on the basis of their normal legislation or administrative practice or that of the other Contracting State;

(c) provide data revealing trade, industrial, professional or commercial or industrial secrets, 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. This Convention may extend, either in its entirety or with modifications, to any territory for whose international relations one or the other of the Contracting States is responsible, and where taxes of a substantially similar nature are required to those to which this Convention applies. Such extension shall take effect from the same date and shall be subject to any modifications and conditions, including those relating to denunciation, specified and concluded between Contracting States in Notes to be exchanged through diplomatic channels.

2. Unless the Contracting States agree otherwise, the denunciation of this Convention shall terminate its application in any territory to which it has extended in accordance with the provisions of this Article.

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

2. This Convention shall enter into force on the thirtieth day following the date on which the instruments of ratification are exchanged and its provisions shall apply:

(a) In the United Kingdom:

(i) with respect to income tax and capital gains tax from the fiscal year beginning on or after 6 April of the calendar year on which this Agreement enters into force;

(ii) as regards corporation tax, from the tax year beginning on 1 April of the calendar year in which this Agreement enters into force, or later.

(b) In Spain:

With regard to Spanish tax, from the financial year beginning on or after the first day of the calendar year on which this Agreement enters into force.

3. The Agreement between the Contracting States, established by an exchange of letters dated 21 December 1968, for the reciprocal exemption of taxes on air transport undertakings, shall cease to have effect on taxes and periods during which this Agreement has effect.

This Convention shall remain in force until it is denounced by one of the Contracting States. Any Contracting State may denounce the Convention by written notification of denunciation delivered to the other Contracting State through diplomatic channels, provided that such notification is made at least six months before the end of the calendar year. In this case, the Convention shall cease to have effect:

(a) In the United Kingdom:

(i) with respect to income tax and capital gains tax from the fiscal year beginning on or after 6 April of the calendar year following that in which the notification is made;

(ii) as regards corporation tax, from the tax year beginning on 1 April of the calendar year following the year in which the notification is made, or later.

(b) In Spain:

As regards the Spanish tax, from the financial year beginning on 1 January of the calendar year following the year in which the notification is made, or thereafter.

In faith, the Plenipotentiaries of the two Contracting States have signed this Convention.

Done in duplicate in London on 21 October 1975, in English and Spanish, both texts being equally reliable.

This Convention shall enter into force on 25 November 1976, 30 days after the Exchange of Instruments of Ratification made on 26 October 1976, in accordance with Article 30.2 thereof.

What is made public for general knowledge.

[ignore]Madrid, October 28, 1976.–The Technical Secretary General of the Ministry of Foreign Affairs, Fernando Arias-Salgado and Montalvo.