Sweden

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

1. This Convention applies to income and capital taxes required by each Contracting State or its administrative subdivisions or local authorities, irrespective of the levy system.

2. Income and capital taxes are those which tax the entire income, the entire capital or any part thereof, including taxes on profits arising from the disposal of movable or immovable property, taxes on the total amount of wages paid by enterprises, as well as taxes on capital gains. Social security contributions are not regarded as taxes.

3. The taxes to which this Convention applies are:

(a) in the case of Sweden:

(i) the general income tax, which includes both the income of seafarers and coupon holders;

(ii) the tax on undistributed profits of companies and that which affects the distribution in relation to the reduction of the shareholding or the liquidation of a company;

(iii) the tax on entertainment professionals;

(iv) The communal income tax; and

(v) the general property tax;

(hereinafter referred to as ‘Swedish tax’).

(b) in the case of 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 rural and livestock wealth, the territorial contribution on urban wealth, the income tax on personal labour, the capital income tax and the tax on commercial and industrial activities and benefits;

(iv) the area fee and corporate income tax, regulated by the law of 27 June 1974 (applicable to undertakings engaged in the research and exploitation of hydrocarbons);

(v) Local taxes on income and wealth;

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

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

1. In this convention, unless the text of the convention is interpreted differently:

(a) the term 'Sweden' means the Kingdom of Sweden, including in any area outside the territorial sea of Sweden and in which, under international law, Sweden's rights 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 Canary Islands, the Spanish cities 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 may be exercised in respect of the seabed and subsoil and its natural resources;

(c) the words 'a Contracting State' and 'another Contracting State' mean Sweden or Spain, 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 to be regarded as a legal person for tax purposes;

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

(g) ‘international traffic’ means any carriage by ship or aircraft operated by an undertaking having its place of effective management in one Contracting State, except where the journey is confined between points of the other Contracting State;

(h) ‘Competent Authority’ means:

(i) in Sweden:

The Minister of Finance or his authorized representatives;

(ii) in Spain:

The Minister of Finance, the Technical Secretary General or any other authority to which the Minister delegates;

(i) the term 'nationals' means:

All natural persons possessing the nationality of a Contracting State and all legal persons, commercial corporations and associations deriving their status as such from the laws in force in a Contracting State.

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 any person who, under the law of that State, is subject to taxation on the basis of his domicile, residence, address or any other criterion of a similar nature, but the term does not include any person who is subject to taxation in that Contracting State only in respect of income derived from the or property situated in that State.

2. Where, under the provisions of paragraph 1, a natural person is resident in both Contracting States, his residence shall be determined according to 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, if he or she does not have permanent housing at his or her disposal in any of the Contracting States, he or she is considered a resident of the Contracting State in which he or she habitually lives;

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

3. Notwithstanding the provisions of paragraph 2, where under the provisions of paragraph 1 a natural person is resident in Sweden because of the so-called ‘three-year rule’ contained in Swedish tax laws and is not also resident in Spain, the competent authorities of the Contracting States shall determine his residence by mutual agreement.

4. Where under the provisions of paragraph 1, a person other than a natural person is a resident of both Contracting States, he or she shall be considered a resident of the Contracting State in which his or her 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. If these facilities sell goods directly to customers or representatives, the facilities are considered to be a permanent establishment;

(b) the maintenance of a deposit of goods or goods belonging to the undertaking for the sole purpose of storing, displaying or delivering them. If the goods were sold on the site of this deposit directly from it, then this deposit would be considered as a permanent establishment;

(c) the maintenance of a deposit of goods or 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 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 person covered by paragraph 5, is considered to constitute a permanent establishment in the Contracting State first mentioned if he has and habitually exercises in that Contracting 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 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 company resident of a Contracting State controls or is controlled by a company resident of the other Contracting State or that carries out activities in that other Contracting State (whether through a permanent establishment or otherwise), does not in itself make any of these companies permanent establishment of the other.

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’ shall be 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 farms and forestry, rights to which private law provisions on real estate apply, usufruct of real estate and rights to receive variable or fixed fees for exploitation or the right to exploit mineral deposits, sources or other land wealth; ships, vessels and aircraft are not considered immovable 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 immovable property used for the exercise of professional services.

1. The profits of an enterprise in one Contracting State may only be subject to taxation of this status, unless the enterprise carries out operations in the other State through a permanent establishment situated in the other 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 in the other Contracting State, the permanent establishment shall in each Contracting State be assigned the benefits it would obtain if it were a 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 incurred for the purposes of the permanent establishment shall be permitted, including management and general administrative expenses incurred for the same purposes, either 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 year by year, unless there are sufficient reasons to the contrary.

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

1. The profits of an undertaking of a Contracting State from the operation of ships or aircraft in international traffic may only be taxed in that State.

2. The provisions of paragraph 1 shall also apply to profits obtained through participation in a pool, in a joint holding or in an international management agency.

3. As regards the profits obtained by the Swedish, Danish and Norwegian air navigation consortium, known as the Scandinavian Airlines System (SAS), the provisions of this Article shall apply, but only to that part of the profits corresponding to its participation in that consortium. B. Aerotransport (ABA), Swedish partner of Scandinavian Airlines System (SAS).

1. 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 accepted or imposed conditions, which differ from those agreed by independent undertakings, the profits which one of the undertakings would have obtained if these conditions did not exist and which, in fact, have not occurred because of them, may be included in the profits of that undertaking and subject to taxation accordingly.

2. Where the profits of an enterprise of one Contracting State that have been taxed in that State are also included in the profits of an enterprise of the other Contracting State and are taxed accordingly and the profits thus included are profits that would have been added to that enterprise of the other State if the conditions established between the enterprises had been those that would have been established between independent enterprises, the State referred to first made an appropriate adjustment to the amount of the tax on those profits in the former State. In determining this adjustment due consideration shall be given to the other provisions of this Convention relating to the nature of the income, and for this purpose the competent authorities of the Contracting States shall consult each other if they deem it necessary.

1. Dividends paid by a company resident of one Contracting State to a resident of the other Contracting State may be taxed in that other State if such resident is the actual recipient of the dividends.

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

(a) 10 per cent of the gross amount of dividends if the beneficiary is a company (excluding companies of persons) holding directly at least 50 per cent of the capital of the company paying the dividends, provided that this holding consists of shares which have been acquired at least one year before the date on which the dividends are paid and paid;

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

The competent authorities of the Contracting States shall decide by mutual agreement how this limitation is to be applied.

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

3. The term “dividends” includes the income from shares, shares or enjoyment bonds, part of mines, parts of founders or other rights that allow the participation of profits, except credit, as well as income from other social participations assimilated to the income of shares by the tax legislation of the Contracting State in which the company that distributes them resides.

4. The provisions of paragraphs 1 and 2 do not apply if the recipient of the dividends, resident of one Contracting State, exercises in the other Contracting State from which the dividends are derived a trade or business through a permanent establishment based in or performing in that other State professional services on a fixed basis in that State and the share generated by the dividends is effectively linked to that permanent establishment or fixed base. In this case, the provisions of Article VII or Article XIV, as appropriate, apply.

5. Where a corporation resident of one Contracting State obtains profits or income from the other Contracting State, that other State may not subject itself to any taxation on dividends paid by the company to persons who are not resident in that other Contracting State, or subject the profits not shared by the company to tax on undistributed profits, even if dividends paid or undistributed profits consist, in whole or in part, of profits or income from that other Contracting State.

However, this provision shall not prevent Spain from seriously affecting a Swedish company which has a permanent establishment in Spain, in accordance with Articles 4 and 23 of Decree 3357/1967 of 23 December, but the rate of taxation shall not exceed 15 per 100.

1. Interest from one Contracting State paid to a resident of the other Contracting State may be taxed by that other State if that resident is the effective preceptor of interest.

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 15 per 100 of the gross amount of interest. The competent authorities of the Contracting States shall decide, by mutual agreement, how this limitation is to be applied.

3. Notwithstanding the provisions of paragraph 2, the interests of the Public Debt issued by a Contracting State may be subject to taxation in the debtor State.

4. The term ‘interest’ includes returns on claims of any kind, with or without a mortgage guarantee, and entitled or not to participate in the profits obtained by the debtor, and in particular returns on public debt and bonds and bonds, including premiums and prizes allocated to bonds or bonds. Penalties for late payments shall not be considered as interest for the purposes of this article.

5. The provisions of paragraphs 1 and 2 do not apply if the recipient of the interest, resident of one Contracting State, exercises in the other Contracting State from which the interest derives a trade or business through a permanent establishment based there, or performs in that other State professional services on a fixed basis there and the credit generated by the interest is effectively linked to that permanent establishment or fixed base. In this case, the provisions of Article VII or Article XIV, as appropriate, apply.

6. Interests are considered to come from a Contracting State when the debtor is the State itself, one of its administrative subdivisions, a local authority or a resident of that Contracting State. However, where the debtor of interest, whether resident of a Contracting State or not, 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 of the interest, the interest shall be deemed to have come from the Contracting State in which the permanent establishment is located.

7. 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, taking into account 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 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. Fees from one Contracting State paid to a resident of the other Contracting State may be subject to taxation in that other State if such resident is the actual recipient of the royalties.

2. However, these fees 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 10 per cent of the gross amount of the fees. The competent authorities of the Contracting States shall decide, by mutual agreement, how this limitation is to be applied.

3. The term ‘royalties’ includes amounts of any kind paid for the use or granting of copyright on literary, artistic or scientific works (including film, film or tape recording television or radio programmes), patents, trademarks 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 or for information relating to industrial, commercial or scientific experience, including payments for technical assistance.

4. The provisions of paragraphs 1 and 2 do not apply if the recipient of the royalties, resident of one Contracting State, exercises in the other Contracting State from which the royalties come, a trade or business through a permanent establishment, or provides in that other State professional services on a fixed basis based on it, 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 VII or Article XIV, as appropriate, apply.

5. The fees are deemed to come from a Contracting State when the debtor is the State itself, one of its administrative subdivisions, a local entity 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 royalties shall be considered as originating in the Contracting State where the permanent establishment is located.

6. 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 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.

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

2. Gains arising from the disposal of movable property forming or forming part of the assets of a permanent establishment held by an enterprise of one Contracting State in the other Contracting State, or of movable property belonging to or 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 (alone or with the enterprise as a whole), or from the fixed base, may be subject to taxation in that other Contracting State.

3. Notwithstanding the provisions of paragraph 2, gains by an enterprise of a Contracting State from the disposal of ships or aircraft used in international trafficking and movable property affected by the operation of such ships and aircraft may be subject to taxation only in that Contracting State. With respect to the profits derived from the Swedish, Danish and Norwegian air transport consortium, known as the Scandinavian Airlines System (SAS), the provisions of this paragraph apply, but only up to the share of profits corresponding to the share held by A.B. in that consortium. Aerotransport (ABA), Swedish partner of Scandinavian Airlines System (SAS).

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

In the application of this paragraph in respect of any right or right referred to in article XII, paragraph 3, the disposal of such right is either not considered to be a sale or less than, at the time of the completion of the contract, the price, fixed and expressed in monetary units, has been clearly established; neither is the disposal of this right considered a sale or, if the disposal has taken place on the condition that the buyer is obliged to resell the right or the seller.

5. The provisions of the first subparagraph of paragraph 4 shall not affect the right of a Contracting State to impose, in accordance with its own law, any gain resulting from the disposal of shares of a company whose principal asset is immovable property, provided that the seller is a resident of the other Contracting State, which

(a) is a national of the first-mentioned Contracting State, without being a national of the other Contracting State;

(b) has been a resident of the first-mentioned Contracting State at any time for a period of five years immediately preceding the disposal; and

(c) at the time of alienation; alone or together with someone closely related, it had a decisive influence on society.

1. Income earned by a resident of a Contracting State for the provision of professional services or the pursuit of other independent activities of a similar nature may only be taxed in this state. In any event, such income may be taxed in the other Contracting State if:

(a) the person concerned normally has a fixed base in the other Contracting State for the pursuit of such activities; however, in this case, income may only be taxed in the other Contracting State to the extent that it is attributable to that base; or

(b) their stay in the other Contracting State shall be extended for a total period or periods of more than one hundred and eighty-three days during the fiscal year of that other State; or

(c) the remuneration received during the tax year from residents of the other Contracting State, on account of their services in the other Contracting State, exceeds:

(i) in the case of services provided in Spain of 100 000 pesetas (100 000 pesetas).

(ii) in the case of services rendered in Sweden of Kr 6 500 (Kr 6,500).

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

3. The provisions of subparagraphs 1 (b) and (c) shall not apply to income received by a broker, general commissioner or any other intermediary enjoying independent status.

1. Without prejudice to the provisions of Articles XVI, XVIII, XIX, XX and XXI, similar salaries, wages and salaries obtained by a resident of a Contracting State on account of employment may only be subject to taxation in this 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 this State.

2. Notwithstanding the provisions of paragraph 1, remunerations obtained by a resident of a Contracting State on the basis of employment in the other Contracting State may only be subject to taxation in the former State if:

(a) the permanent beneficiary 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 for, or on behalf of, an employer who is not a resident of the other state; and

(c) Remuneration is not paid from a permanent establishment to a fixed headquarters which the person for whom the work is performed has in the other state.

3. Notwithstanding the provisions of paragraphs 1 and 2, remunerations earned on account of employment on board a ship or aircraft in international traffic may be taxed in the Contracting State where the company ' s effective headquarters are located. Where a resident of Sweden obtains remuneration for employment on board an aircraft operated in international traffic by the Swedish, Danish and Norwegian air navigation consortium known as the Scandinavian Airlines System (SAS), this remuneration shall only be subject to taxation in Sweden.

The participations of directors and 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 subject to taxation in that other Contracting State.

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

2. Where the income relating to the personal activities of one of these performing professionals or sportsmen does not accrue to that professional or sportsman himself, but to another person, that income may, notwithstanding the provisions of Articles VII, XIV and XV, be subject to taxation in the Contracting State in which the activities of the performing professional or sportsman are exercised.

1. Without prejudice to article XIX, paragraph 2, pensions and other similar remuneration in consideration of previous employment, as well as annuities paid to a resident of a Contracting State, 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.

3. Notwithstanding paragraph 1, payments made under the social security system of a Contracting State, as well as payments arising from a pension on account of life insurance in a Contracting State, may be subject to taxation in that State.

The provisions of this paragraph apply only to natural persons who are nationals of the Contracting State from which the payments originate.

1. (a) Remunerations excluding pensions, paid by a Contracting State, one of its administrative subdivisions or local entities, to a natural person, in consideration of the services rendered to that State, subdivision or local entity, may be subject to taxation only in that State.

(b) Such remuneration may, however, be subject to taxation in the other Contracting State only if the services are provided in that State and the recipient is a resident of that Contracting State who:

(i) is a national of that state; or

(ii) has not acquired the status of resident of that State for the sole purpose of providing such services.

2. (a) Pensions paid by a Contracting State, one of its administrative subdivisions or local entities, directly or from funds made up of them, to a natural person in consideration for services rendered to that State, subdivision or local entity, may be subject to taxation only in that State.

3. The provisions of Articles XV, XVI and XVIII 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 or one of its administrative subdivisions or local authorities.

1. A student or business apprentice who is or was immediately prior to his or her 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 or her education or training, shall be exempt from tax in the first Contracting State in respect of the sums he or she receives for his or her support, education or practice, provided that such payments come from that State.

2. A student from a university, school or other educational institution of a Contracting State, who temporarily stays in the other Contracting State and is employed in that State for a period or periods not exceeding a total of one hundred days in the course of the calendar year, shall be exempt from tax in that other State in relation to the remuneration he receives for the employment exercised in that State, if the purpose of the employment is to assist in his studies.

A natural person who is or was, in the period immediately preceding his visit to a Contracting State, a resident of the other Contracting State and who, at the invitation of a university, higher education institution, school or other cultural institution of the first Contracting State, visits that Contracting State for the sole purpose of teaching or conducting research in such institutions for a period not exceeding one year, shall be exempt from taxation in that first Contracting State in respect of the remuneration he receives as a result of such activities.

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

2. The assets represented by movable property forming part of the assets of a permanent establishment of an enterprise, or by movable property belonging to a fixed headquarters used for the provision of professional services, may be taxed in the Contracting State in which the permanent establishment or fixed headquarters are located.

3. Ships and aircraft operated internationally by an enterprise of a Contracting State and movable property belonging to the operation of such ships and aircraft shall be subject to taxation only in that Contracting State.

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

1. Where a resident of a Contracting State obtains income or has capital which, in accordance with the provisions of this Convention, may be taxed in the other Contracting State, the first State shall permit:

(a) as a deduction from the income tax of that person, an amount equal to the income tax paid in that other Contracting State;

(b) as a deduction from the capital tax of that person, an amount equal to the capital tax paid in that other Contracting State.

However, the amount deducted in either case may not exceed the part of the income or capital tax, respectively, calculated before the deduction, corresponding to the income or capital that may be taxed in the other Contracting State.

2. Where a resident of a Contracting State obtains income which, in accordance with Article XIX, is subject to taxation only in the other Contracting State, the first State shall, as a deduction from income tax, allow that part of the tax corresponding to the income obtained by the other Contracting State.

3. Notwithstanding the provisions of paragraph 1, dividends paid by a company resident in Spain to a company resident in Sweden shall be exempt from taxation in Sweden in the amount by which the dividends would have been exempted under Swedish law, had both companies been Swedish. This exemption shall only apply if the profits for which the dividends are paid have been subject in Spain to the normal income tax applicable on the date of signature of this agreement, or to an income tax comparable to it, or if the principal part of the profits of the company paying the dividends derives, directly or indirectly, from commercial activities other than the administration of titles and other similar goods, and those activities have been carried out in Spain by the company paying the dividends, or by a company in which that company holds at least 25 per cent of the capital entitled to vote.

4. In the application of paragraph 1, where the exemption or reduction of the Spanish tax on dividends, interest or royalties received by a resident of Sweden has been granted for a period of time, the credit against the Spanish tax on dividends, interest or royalties received by a resident of Sweden, the credit against the Swedish tax shall be indicated in an amount equal to the amount of the tax that would have been required in Spain if such exemption or reduction had not been granted.

5. Where a resident of a Contracting State obtains a gain from those referred to in article XIII, paragraph 5, or receives a payment from those referred to in article XVIII, paragraph 3, which may be subject to taxation in the other Contracting State, that other State indicates, as a deduction from the income tax of that person, an amount equal to that of the tax paid in the first State on the gain or payment, respectively. However, the amount deducted may not exceed that part of the income tax, calculated before the deduction corresponding to the gain or payment, respectively, which may be taxed in the other Contracting State, was made.

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

1. Nationals of a Contracting State, whether or not they are residents of a 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 that Contracting State who are or may be subject to the same conditions are subject.

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

3. A permanent establishment held by an enterprise of one Contracting State in the other Contracting State shall not be subject to taxation in that other Contracting State in a less favourable manner than undertakings of that other 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 consideration of its civil State or family burdens, or to grant any tax exemption in one Contracting State, in respect of dividends or other payments made to a company resident of the other Contracting State.

4. Except where article IX, paragraph 1, article XI, paragraph 7, and article XII, paragraph 6, apply, interest, royalties and other disbursements that an enterprise of one Contracting State pays to a resident of the other Contracting State may be deducted, for the purpose of determining the profits subject to taxation of that enterprise, as if they were incurred with a resident of the former State.

Similarly, any debt owed by an enterprise of one Contracting State to a resident of the other Contracting State may be deducted, in the case of the determination of the capital subject to taxation of that enterprise, as if it had been owed to a resident of the former State.

5. 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 similar undertakings of the first Contracting State are or may be subject.

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

1. Where a resident of a Contracting State considers that the measures taken by one or both Contracting States imply or may entail for the purpose of 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. The case must be submitted within three years of the first notification of the tax-causing measure considered to be in disagreement with the agreement.

2. The competent authority shall, if it finds the complaint well founded and if it is not in a position to adopt a satisfactory solution, make every effort to resolve the matter by amicable agreement with the competent authority of the other Contracting State in order to avoid the imposition not in conformity with this Convention. Any agreement reached would be implemented despite the time limits in the national laws of the Contracting States.

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

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

1. The competent authorities of the Contracting States shall exchange the information necessary for the implementation of this Convention. Such authorities shall also exchange the information necessary for the application of the domestic legislation of the Contracting States relating to the taxes covered by this Convention, to the extent that such taxation is in conformity with it. However, in the case recently mentioned, the competent authorities are not obliged to exchange information which cannot be obtained from the documents kept by the financial authorities but which require a special investigation. Such information shall be kept secret and shall not be disclosed to any person or authority, including a court, which is not responsible for the settlement or collection of the taxes covered by this Agreement.

2. Under no circumstances may the provisions of paragraph 1 be interpreted as precluding one of the Contracting States from:

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

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

(c) transmit information 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 shall be subject to ratification and the relevant instruments of ratification shall be exchanged in Stockholm as soon as possible.

2. This Convention shall enter into force on the date of the exchange of instruments of ratification and its provisions shall apply:

(a) in the case of Sweden, in respect of coupon tax on dividends due in or after the calendar year immediately preceding the year in which this Convention enters into force, in respect of taxes on other income earned in or after the calendar year immediately preceding the year in which this Convention enters into force and in respect of the tax on the assets encumbered in or after the calendar year, immediately preceding that in which this Convention enters into force.

(b) in the case of Spain, in respect of income attributable to the calendar year immediately preceding the year in which this Convention enters into force and subsequent years.

This Convention shall remain in force indefinitely, but any Contracting State may denounce it after a period of five years from the date of its entry into force by a written notification of denunciation delivered to the other Contracting State through diplomatic channels, provided that such notification is made until 30 June of any calendar year.

In this respect, this Convention shall cease to apply in respect of income earned on or after the first day of January of the year immediately following that in which the complaint took place, and in respect of the Swedish property tax, in respect of the encumbered assets in or after the second calendar year following that in which the complaint took place.

In faith, the undersigned, having been duly authorized to do so, have signed this Convention.

Done at Madrid on 16 June 1985, in duplicate, in the Spanish, Swedish and English languages, all texts being equally reliable. However, in case of doubt, the English text will prevail.

At the time of signing the Agreement between the Government of Spain and the Government of Sweden on the avoidance of double taxation on income and capital taxes, the undersigned have agreed on the following provisions which form an integral part of this Convention.

1. AD/ARTICLE II, PARAGRAPH (b)(ii)

During the period from 1 January to 8 April 1975, the Convention also applies to ‘the special charge of 4 per 100 laid down by Article 104 of Law 41/1964 of 11 June’.

2. AD/ ARTICLE IV, PARAGRAPH 3

The provisions of article IV, paragraph 3, apply only to Swedish nationals who move from Sweden and are limited to the first three years from the day of their departure.

The provisions of Swedish tax laws referred to in article IV, paragraph 3, are contained in paragraph 53 of the Community Income Tax Act.

3. AD/ARTICLE V, PARAGRAPH 2 (g)

Where an undertaking of one Contracting State has in the other Contracting State several simultaneous construction or assembly works and the duration of any such contract exceeds a period of twelve months, the competent authorities shall make every effort to decide by a friendly agreement whether all contracts constitute a permanent establishment in the other Contracting State.

The same principle shall apply if an undertaking of one Contracting State has in the other Contracting State several consecutive construction or assembly works and the additional duration of such contracts exceeds a period of twelve months.

4. AD/art. XXIV, para. 4

The competent authorities of the Contracting States shall decide by amicable agreement the Spanish tax legislation to which the provisions of this paragraph apply.

5. AD/art. XXV, para. 3

The provisions of the first subparagraph of paragraph 3 do not oblige Sweden, when imposing a permanent establishment of a Spanish company, to grant this deduction for dividends distributed by that company, in the same way as it grants it to Swedish companies pursuant to Royal Decree No 94/1967 on the tax deduction of certain dividends. At the time of the signing of this agreement, the decree establishes that this deduction may not exceed five per cent of the paid-up capital per year, provided that this capital has been paid up after 30 June 1966 and the deduction is not granted for more than ten calendar years and may in no case exceed the fifteenth year of taxation to be counted from the year in which the amount of the shares is disbursed.

The competent authorities shall consult to decide whether the provisions of the first paragraph shall continue to apply in the event that the said Swedish legislation is amended in respect of the maximum amount of deduction agreed or at other similar points.

6. AD/ARTICLE XXVII, PARAGRAPH 1

The competent authorities of the Contracting States shall decide by amicable agreement the manner of application of this paragraph.

In faith, the undersigned, having been duly authorized to do so, have signed this Convention.

Done at Madrid at 16 June, one thousand nine hundred and seventy-six, in duplicate, in the Swedish, Spanish and English languages, all texts being equally reliable. However, in case of doubt, the English text will prevail.

This Convention entered into force on 21 December 1976, the date of the exchange of instruments of ratification in accordance with its article XXIX, paragraph 2.

What is made public for general knowledge.

Madrid, 8 January 1977.-The Technical Secretary General of the Ministry of Foreign Affairs, Fernando Arias-Salgado and Montalvo.