Romania

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

1. This Convention applies to taxes on income and wealth payable by each Contracting State, irrespective of the system of levy.

2. Income and property taxes are those which tax all or any part of the income or property, including taxes on profits resulting from the disposal of movable or immovable property.

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

(a) With regard to Romania:

− Income tax obtained by natural and legal persons;

− income tax on joint ventures formed in partnership with Romanian economic organisations and foreign partners;

− income tax on agricultural activities.

(hereinafter referred to as ‘Romanian taxes’).

(b) As regards Spain:

− general tax on the income of physical persons;

− the general income tax on companies and other legal entities.

− the following taxes: the Rustic and Urban Territorial Contributions; the Personal Work Returns Tax; the Capital Income Tax; and the Commercial and Industrial Activities and Benefits Tax.

− the Area Canon and the Commercial Benefits Tax, regulated by the Act of 27 June 1974, for companies engaged in the research and exploitation of hydrocarbons.

- the special tax on the assets of physical persons and the special tax on certain personal labour income, regulated by Law 50/1977 of 14 November on urgent measures of tax reform.

(hereinafter referred to as ‘Spanish taxes’).

4. The Convention shall also apply to taxes of an identical or similar nature and to property taxes which enter into force after the signature of this Convention and which are added to or replaced by current taxes. The Contracting States shall communicate the amendments to their respective tax laws.

1. (a) (i) The term ‘Romania’ refers to the territory of the Socialist Republic of Romania, as well as to areas outside the territorial waters of Romania over which, in accordance with international law and under its law, Romania may exercise the rights relating to maritime soil and subsoil and its natural resources.

(ii) The term ‘Spain’ means the Spanish State and the areas adjacent to the territorial waters of Spain over which, in accordance with international law, and in accordance with its legislation, Spain may exercise the rights relating to the maritime seabed and subsoil and its natural resources.

(b) The terms ‘one Contracting State’ and ‘the other Contracting State’ refer, depending on the context, to Spain or Romania.

(c) The term ‘person’ includes natural persons, corporations and any other grouping of persons.

(d) The term 'Society' means any legal person - and includes a joint venture incorporated under Romanian law - or any entity which is considered a legal person for tax purposes.

(e) The terms ‘Company of one Contracting State’ and ‘Company of the other Contracting State’ mean, respectively, an Enterprise operated by a resident of one Contracting State and an Enterprise operated by a resident of the other Contracting State.

(f) The expression ‘competent authority’ means:

(i) as regards Romania, the Minister of Finance or his authorised representative;

(ii) as regards Spain, the Minister of Finance or his authorised representative.

(g) The term ‘tax’ refers, depending on the context, to the Romanian tax or the Spanish tax.

(h) The term ‘national’ means:

(i) any natural person possessing Spanish nationality or Romanian citizenship, as the case may be;

(ii) any legal person, Society of Persons and Associations incorporated under the law in force in a Contracting State.

(i) “International traffic” means any transport carried out by a vessel, aircraft or land vehicle operated by an Enterprise whose place of effective management is located in one Contracting State, except where the vessel, aircraft or land vehicle is operated only between two points located in the other Contracting State.

(j) The expression ‘a territorial administrative unit’ refers to Romania.

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

1. For the purposes of this Convention, the term ‘resident of a Contracting State’ means any person who, under the law of that State, is subject to taxation in that State by reason of his domicile, residence, place of address or any other criterion of a similar nature. However, this term does not include persons who are subject to taxation in this State solely for the income they obtain from sources located in that State or for the assets they possess in that State.

2. Where, under the provisions of paragraph 1, a natural person is considered a resident of both Contracting States, his or her situation shall be resolved as follows:

(a) This person shall be considered a resident of the Contracting State where he or she has a permanent dwelling at his or her disposal. If you have permanent housing at your disposal in both States, you will be considered a resident of the Contracting State with which you have 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 habitually lives 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 two Contracting States shall decide the case by mutual agreement.

3. 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 through which an Enterprise carries out all or part of its activity.

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

(a) A management headquarters.

(b) A branch office.

(c) One office.

(d) One factory.

(e) One workshop.

(f) A mine, quarry or any other place of extraction of natural resources.

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

3. The term ‘permanent establishment’ is considered not to include:

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

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

(c) The maintenance of a warehouse of goods belonging to the Company for the sole purpose of their processing by another Company.

(d) The maintenance of a fixed place of business for the sole purpose of purchasing goods or collecting information for the Company.

(e) The maintenance of a fixed place of business used by the Enterprise for the sole purpose of advertising, providing information, conducting scientific research or carrying out similar activities that are preparatory or auxiliary in nature.

(f) The maintenance of a warehouse of goods belonging to the Company and exhibited at a trade fair or exhibition, if sold by the Company on the occasion of such fair or exhibition.

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

5. An Enterprise of one Contracting State is not considered to have a permanent establishment in the other Contracting State on the sole ground that it carries out activities in that other State through a broker, a general commissioner, or any other mediator enjoying an independent status, provided that these persons act within the ordinary framework of their activity.

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

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

2. The term ‘real property’ shall have the meaning attributed to it by the Law of the Contracting State in which the property in question is situated. In any event, this term includes accessories, livestock and equipment used on agricultural and forestry holdings, rights to which the provisions of law relating to real estate, the use of immovable property and rights to variable or fixed payments for exploitation or concession, exploitation of mineral deposits, sources and other land resources apply; ships and aircraft are not considered immovable property.

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

4. The provisions of paragraphs 1 and 3 also apply to income derived from the immovable property of an Enterprise and from immovable property used for the pursuit of a liberal profession.

1. The profits of an Enterprise of one Contracting State may be taxed only in this State, unless the Enterprise carries out its business in the other Contracting State through a permanent establishment located therein. If the Enterprise does so, the profits of the Enterprise may be taxed in the other State, but only to the extent that they can be attributed to this permanent establishment.

2. Without prejudice to paragraph 3, when an Enterprise of one Contracting State carries out its activity in the other Contracting State through a permanent establishment situated therein, in each Contracting State, the profits it would have obtained from being a separate and separate Enterprise carrying out the same or similar activities, under the same or similar conditions, shall be attributed to that establishment and shall be treated entirely independently with the Enterprise from 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 realization of the purposes of the permanent establishment, including management and general administrative expenses for the same purposes, shall be permitted, whether incurred in the State in which the permanent establishment is located or elsewhere.

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

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

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

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

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

2. Notwithstanding paragraph 1 and article VII, profits from operating ships, aircraft or land vehicles primarily used to transport passengers or goods between points located exclusively in a Contracting State may be taxed in that State.

3. The provisions of paragraphs 2 and 2 apply equally to the profits covered by the said paragraphs which an Enterprise of a Contracting State obtains from its participation in a pool, joint exploitation or International Organisation of Exploitation.

1. 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 an Enterprise of the other Contracting State.

And in either case, the two Companies are, in their commercial or financial relations, bound by accepted or imposed conditions, which differ from those that would be agreed by independent Companies, the profits that one of the Companies would have obtained if these conditions did not exist and which in fact did not occur because of them, may be included in the profits of this Company and subject to taxation accordingly.

2. Where a Contracting State includes in the profits of an Enterprise of that State, and accordingly imposes on it the profits on which an Enterprise of another Contracting State has been subject to taxation in that other State, and the profits thus included are profits which would have been realized by the Enterprise of the first State if the terms agreed between the two Enterprises had been those agreed between two Independent Enterprises, the first State shall make a corresponding adjustment to the amount of the tax it has received on those profits.

The other provisions of this Convention relating to the nature of the income shall be taken into account in determining this adjustment.

3. A Contracting State shall not rectify the profits of an Enterprise, in the case referred to in paragraph 1, after the expiration of the period provided for in its national law.

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.

2. However, these dividends may also be taxed in the Contracting State in which the Company paying the dividends resides, and in accordance with the law of that State, but if the recipient of the dividends is the beneficial owner, the tax thus required may not exceed:

(a) 10 per cent of the gross amount of the dividends; if the beneficiary of the dividends is a Company which holds directly at least 25 per 100 of the Company's capital which pays the dividends.

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

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

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

3. The term ‘dividends’ used in this Article covers the income from shares, shares or enjoyment bonds, parts of mines, parts of founders or other rights, except credit rights, which permit participation in profits, as well as income from other social shares subject to the same tax regime as the income from shares under the tax legislation of the State in which the distribution company resides. This term also refers to income distributed to its members by mixed companies incorporated under Romanian law.

4. The provisions of paragraphs 1 and 2 do not apply if the dividend beneficiary, resident of a Contracting State, exercises in the other Contracting State of which the Company that pays the dividends is resident, an industrial or commercial activity through a permanent establishment there situated, or provides professional services through a fixed base there, with which the share generated by the dividends is effectively linked. In such cases, the provisions of Article VII or of Article XV shall apply, as appropriate.

5. Where a Company resident of one Contracting State obtains profits or income from the other Contracting State, the other State may not require any tax on dividends paid by the Company, except to the extent that these dividends are paid to a resident of that other State or the share generated by the dividends is effectively linked to a permanent establishment or a fixed base situated in that other State, or subject the undistributed profits of the Company to a tax on them, even if the dividends paid or benefits not distributed consist, in whole or in part, of profits or income from that other State.

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

2. However, these interests may also be subject to taxation in the Contracting State from which they come and in accordance with the law of that State, but if the recipient of the interest is the beneficial owner, the tax thus required may not exceed 10 per cent of the amount of interest. The competent authorities of the Contracting States shall, by mutual agreement, determine how this limit is to be applied.

3. Notwithstanding the provisions of paragraph 2 above, interest on loans directly granted or guaranteed by a Contracting State may be taxed only in that State.

4. The term ‘interest’ used in this Article includes income from claims of any kind, with or without mortgage guarantees or a benefit-sharing clause of the debtor, and in particular income from public funds and bonds or bonds, including premiums and lots attached to such securities. Penalizations for late payment are not considered as interest within the meaning of this article.

5. The provisions of paragraphs 1 and 2 do not apply if the beneficiary of the interest, resident of a Contracting State, exercises in the other Contracting State from which the interest is derived an industrial or commercial activity through a permanent establishment there situated, or provides professional services through a fixed base there, with which the credit generated by the interest is effectively linked. In such cases, the provisions of Article VII or of Article XV shall apply, as appropriate.

6. Interests are considered to come from a Contracting State when the debtor is the State itself, a political subdivision, a territorial administrative subdivision, a local community or a resident of that State. However, where the debtor of interest is resident or not resident in a Contracting State, it has a permanent establishment or a fixed basis in respect of which the debt giving rise to the payment of the interest and bearing the burden of the interest has been incurred, it shall be considered as originating in the Contracting State where the permanent establishment or fixed base is situated:

7. Where, on account of the special relations between the debtor and the creditor or of those between them and third parties, the amount of interest paid, having regard to the claim for which it is paid, exceeds that agreed by the debtor and the creditor in the absence of such relations, the provisions of this article apply only to the latter amount. In this case, the excess may be imposed in accordance with the laws of each Contracting State and taking into account the other provisions of this Convention.

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

2. However, these fees may also be subject to taxation in the Contracting State from which they come and in accordance with the law of that State; but if the recipient is the beneficial owner, the tax thus required may not exceed 10 per cent of the gross amount of such fees.

3. The term ‘royalties’ used in this Article includes quantities of any kind paid for the use or grant of a copyright, patent, trademark or trade mark, design, plan, formula or secret procedure, as well as for the use or grant of use of industrial, commercial or scientific equipment, and for information relating to experiences acquired in the industrial, commercial or scientific field; this term also includes quantities of any kind relating to cinematographic films and recorded works on magnetoscopic films and bands intended for television.

4. The provisions of paragraphs 1 and 2 do not apply if the beneficiary of the royalties, resident of a Contracting State, exercises in the other Contracting State from which the royalties come a commercial or industrial activity through a permanent establishment there located or provides professional services through a fixed base there, with which the right or ownership for which the royalties are paid is effectively linked. In such cases, the provisions of Article VII or of Article XV shall apply, as appropriate.

5. Fees are considered to come from a Contracting State where the debtor is the State itself, a political subdivision, a territorial administrative subdivision, a local community, or a resident of that State. However, where the debtor of the royalties, whether resident or not of a Contracting State, has in a Contracting State a permanent establishment or a fixed basis in respect of which the contract giving rise to the payment of the royalties and bearing the burden thereof has been concluded, they shall be considered as originating in the Contracting State where the permanent establishment or fixed base is situated.

6. Where due to special relationships between the debtor and the creditor or between them and third parties, the amount of royalties paid, taking into account the benefit for which they are paid, exceeds the amount that would have been agreed by the debtor and the creditor 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. Commissions from one Contracting State and paid to a resident of the other Contracting State may be subject to taxation in that other State.

2. However, these commissions may also be subject to taxation in the Contracting State from which they come and according to the law of that State, but if the recipient of them is the beneficial owner, the tax thus imposed may not exceed 5 per 100 of its gross amount.

3. The term ‘commissions’ used in this Article means remuneration paid to any person for the services provided by him as an intermediary; the term does not include remuneration paid in the form of income derived from independent activities covered by Article XV, or income from dependent professions covered by Article XVI.

4. The provisions of paragraphs 1 and 2 do not apply if the beneficiary of the commissions, resident of a Contracting State, exercises in the other Contracting State from which the commissions originate an industrial or commercial activity through a permanent establishment, as defined in article V, which is situated there, or engages in a liberal profession through a fixed base there, with which the said commissions are effectively linked. In such cases, the provisions of Article VII or of Article XV shall apply, as appropriate.

5. Commissions are considered to come from a Contracting State when the debtor is the State itself, a political subdivision, a territorial administrative subdivision, a local community or a resident of that State. However, where the debtor of the commissions, whether or not he is a resident of a Contracting State, has a permanent establishment or a fixed basis in a Contracting State for which the obligation to pay the commissions has been entered into and bear the burden of the commissions, they shall be deemed to be from the Contracting State where the permanent establishment or fixed base is situated.

6. Where, on account of the special relations between the debtor and the creditor or of those between them and third parties, the amount of the commissions, having regard to the services for which they are paid, exceeds the normal amount agreed upon by the debtor and the creditor in the absence of such relations, the provisions of this article apply only to the latter amount. In this case, the excess of the commissions may be imposed in accordance with the law of each Contracting State, and 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 such property is located.

2. Profits arising 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 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 overall alienation of that permanent establishment (only or with the Enterprise as a whole) or from that fixed basis, may be taxed in that other State.

However, gains from the disposal of movable property covered by article XXIV, paragraph 3, may be taxed only in the Contracting State where such assets are subject to taxation under article XXIV, paragraph 3.

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

1. An income obtained by a resident of a Contracting State through the provision of a liberal profession or the pursuit of other independent activities of a similar nature may only be taxed in that State unless that resident normally has a fixed basis in the other Contracting State for the exercise of his or her activities. If it has such a fixed base, income may be taxed in the other State, but only to the extent that it is attributable to this fixed base.

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

1. Without prejudice to articles XVII, XIX and XX, salaries, wages and similar remuneration obtained by a resident of a Contracting State on the basis of employment may only be taxed in that State unless the employment is exercised in the other Contracting State. In the latter case, the remuneration received for this purpose may be subject to taxation in the other State.

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

(a) The recipient does not remain in total in the other State, in one or more periods more than one hundred and eighty-three days during the fiscal year in question.

(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 borne by a permanent establishment or a fixed basis which the employer has in the other State.

3. Notwithstanding the provisions of this article, remunerations earned on account of employment on board a ship, aircraft or land vehicle operated in international traffic may be subject to taxation in the Contracting State where the effective headquarters of the Enterprise is located.

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

1. By way of derogation from Articles XV and XVI, the rents which the professionals of the spectacle, such as theatre, cinema, radio or television artists, and musicians, as well as sportsmen, may obtain for the exercise of their activities as such, may be subject to taxation in the Contracting State in which such activities are carried out.

2. Notwithstanding the provisions of Articles VII, XV and XVI, where the income derived from the activities carried out by an artist of the spectacle or an athlete personally and as such is attributed not to the artist himself or to another person, such income may be subject to taxation in the Contracting State in which the activities of the artist or athlete are carried out.

3. Revenues obtained by performing artists or sportsmen resident in one Contracting State in connection with activities carried out in the other Contracting State on the occasion of cultural exchanges established by Cultural Conventions concluded between the two Contracting States may be taxed only in the first Contracting State.

1. Without prejudice to article XX, paragraph 1, pensions and similar remuneration paid to a resident of a Contracting State on account of previous employment may only be taxed in that State.

2. Maintenance and other similar maintenance payments from one Contracting State and paid to a resident of the other Contracting State, who is the actual beneficiary of such payments, may only be taxed in that other State.

1. (a) Remuneration, excluding pensions, paid by a Contracting State or one of its political subdivisions, territorial administrative subdivisions or local authorities to a natural person for the purpose of services rendered in that State or to such subdivisions or collectivity, may be subject to taxation only in that State.

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

(i) possesses the nationality of this State; or

(ii) has not acquired the status of resident of this State solely to provide the services.

2. (a) Pensions paid by a Contracting State or one of its political subdivisions, territorial administrative subdivisions or local authorities, either directly or from funds constituted for that purpose, to a natural person on the basis of services rendered to that State or to such subdivisions or collectivities, may only be subject to taxation in that State.

(b) However, such pensions may be subject to taxation in the other Contracting State only if the beneficiary is a resident and a national of that State.

3. Articles XVI, XVII and XIX apply to remuneration and pensions paid for services provided within the framework of an industrial or commercial activity carried out by a Contracting State, one of its political subdivisions, territorial administrative subdivisions or local authorities.

1. The amounts that a student, a trainees or a person undergoing vocational training, who is or has been immediately resident of a Contracting State, and remains in the other Contracting State for the sole purpose of continuing his studies or training, receive to cover his costs of maintenance, education or training, may not be subject to taxation in that other State, provided that they come from sources outside that other State.

2. In the event that the students referred to in paragraph 1 engage in a remunerated activity in the country in which they pursue their studies, the remuneration thus obtained shall not be subject to taxation in the latter State, provided that the duration of such activity does not exceed five years, and that the remuneration referred to above does not exceed 170,000 pesetas or its equivalent in lei per year.

1. Any remuneration that teachers or other members of teaching staff, other than those covered by article XV, paragraph 2, resident of a Contracting State at the beginning of their stay in the other Contracting State, who remain temporarily in the latter State for the purpose of teaching or engaging in scientific research, for a period not exceeding two years, at a university or other officially recognized educational institution, may be subject to taxation only in the first Contracting State.

2. The provision in paragraph 1 does not apply to remuneration received for the conduct of investigative work, if such work is carried out primarily in the particular interest of one or more persons.

1. The income of a resident of a Contracting State, whatever its source, not referred to in earlier articles of this Convention may be taxed only in that State.

2. Paragraph 1 does not apply where the beneficiary of such income, resident of one Contracting State, engages in an industrial or commercial activity in the other Contracting State through a permanent establishment located there, or provides professional services through a fixed base, situated there, with which the right or ownership for which the income is paid is effectively linked. In such cases, the provisions of article VII or of article XV, as appropriate, apply.

1. Property constituted 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. Property consisting of movable property forming part of the assets of a permanent establishment of an Enterprise, or of movable property belonging to a fixed base for the pursuit of a liberal profession, may be taxed in the Contracting State where such permanent establishment or fixed base is situated.

3. Vessels, aircraft and land vehicles operated in international traffic, as well as movable property affected by their operation, may be subject to taxation only in the Contracting State in which the effective headquarters of the Enterprise are located.

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

1. As regards Romania, double taxation is avoided as follows:

(a) Tax paid by a Romanian resident on taxable income in Spain pursuant to this Agreement shall be deductible from the amount of Romanian tax payable under Romanian tax law.

(b) The profits paid by Romanian State enterprises to the State budget are considered as a Romanian tax.

2. As regards Spain, double taxation is avoided as follows:

(a) Where a resident of Spain obtains income which, under the Convention, may be taxed in Romania, Spain shall deduct from the tax which charges the income of that resident an amount equal to the tax paid in Romania. However, the amount thus deducted may not exceed the part of the tax, calculated before deduction, corresponding to the income obtained in Romania, and such deduction shall apply to both general and account taxes.

(b) Where the income of a company resident in Spain includes dividends received from a company resident in Romania, the first company is entitled to the same deduction that would have been applied if both companies had been resident in Spain.

3. Where, under any provision of the Convention, income obtained or property held by a resident of a Contracting State is exempt from taxation in that State, the latter may, however, take into account such income or property for the purpose of calculating the amount of tax on the rest of the income or property of that resident.

4. For the purposes of this article, the profits, income or profits of a resident of a Contracting State who have borne the tax of the other Contracting State under this Convention are deemed to have come from sources located in this other State.

1. Nationals of a Contracting State, whether or not they are residents of any of the Contracting States, 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 they are or may be subject nationals of that other State who are in the same conditions.

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

This provision cannot be interpreted as obliging a Contracting State to grant to residents of the other Contracting State the personal deductions, reliefs and tax deductions it grants to its own residents in view of their marital status or family burdens.

3. Except in the case of the application of the provisions of article IX, paragraph 1, article XI, paragraph 4, and article XII, paragraph 4, interest, royalties and other amounts paid by an Enterprise of one Contracting State to a resident of the other Contracting State are deductible for the determination of the taxable profits of this Enterprise, on the same terms as if they had been paid to a resident of the former State.

4. Companies of one Contracting State, whose capital is in whole or, in part, directly or indirectly, detained or controlled by one or more residents of the other Contracting State, are not subject in the first Contracting State to any tax or obligation relating thereto, which is not required or more burdensome than those to which they are or may be subject, other Companies of the same nature as that of that first Contracting State.

5. Taxes on income, profits and wealth, as well as transfers of profits to the State budget which, under Romanian law, are due to the Socialist Units, shall only be borne by such Units.

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

1. Where a resident of a Contracting State considers that the measures taken by one or both Contracting States imply or may represent for him an imposition that is not in conformity with the provisions of this Convention, irrespective of the remedies provided for by the national law of those States, he may submit his case to the competent authority of the Contracting State of which he is a resident. The case must be brought within two years of the first notification of the measure involving an imposition not in accordance with the Convention.

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 to the matter, make every effort to resolve the matter by amicable agreement with the competent authority of the other Contracting State in order to avoid an imposition not in conformity with the Convention.

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

4. The competent authorities of Contracting States may communicate directly with each other in order to reach an agreement as indicated in the preceding paragraphs. Where it is considered that personal contacts may facilitate the achievement of this agreement, such contacts may take place within a Commission, composed of representatives of the competent authorities of the Contracting States.

1. The competent authorities of the Contracting States shall exchange the information necessary to implement the provisions of this Convention or of the domestic law of the Contracting States relating to taxes covered by the Convention, to the extent that the taxation required by them is in accordance with the Convention. The information thus exchanged shall be kept secret and shall only be communicated to the persons or authorities responsible for the management or collection of the taxes covered by the Convention.

2. In no case can the provisions of paragraph 1 be interpreted as obliging a Contracting State to:

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

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

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

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

1. This Convention shall be ratified and the Instruments of ratification shall be exchanged in Bucharest.

2. This Convention shall enter into force upon the exchange of the Instruments of ratification, and its provisions shall apply:

(a) With respect to tax withheld from the source on amounts paid or credited to non-residents from the first January of the year of the exchange of instruments of ratification; and

(b) With regard to other taxes, from the fiscal year beginning on the first January of the exchange of instruments of ratification.

This Convention shall remain in force indefinitely; however, from the fifth year following that in which it entered into force, any Contracting State may, until 30 June, including every calendar year, give notice of denunciation to the other Contracting State, and in such case the Convention shall cease to apply:

(a) With regard to tax withheld from the source on amounts paid or credited to non-residents, from the first January of the year immediately after the year in which the notice was given; and

(b) In respect of other taxes, the tax year beginning on the first January of the year immediately after the year in which the notice was given.

In faith of which the undersigned, duly authorized for this purpose, have signed this Convention.

All this in double copies, in Madrid on 24 May 1979, in the Spanish and Romanian languages, both versions being equally reliable.

This Convention entered into force on 28 June 1980 by exchange of instruments of ratification, as provided for in Article XXX thereof.

What is communicated for general knowledge.

Madrid, September 12, 1980. –The Technical Secretary General of the Ministry of Foreign Affairs, Juan Antonio Pérez-Urruti Maura.