China

This Convention applies to persons resident in one of the Contracting States.

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

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

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

(a) In Spain:

(I) Income Tax of Physical Persons.

(II) Corporate Tax.

(III) The Wealth Tax.

(IV) Local Taxes on Income and Heritage.

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

(b) In the People ' s Republic of China:

(I) Income tax on natural persons.

(II) Income tax on Chinese and foreign joint ventures.

(III) Income tax of foreign companies.

(IV) Local income tax.

(hereinafter referred to as ‘Chinese tax’).

4. This Convention shall also apply to taxes of an identical or similar nature which are established after the date of signature of the Convention and which are added to or replaced by the current taxes referred to in paragraph 3. The competent authorities of the Contracting States shall notify each other of any substantial changes made to their respective tax laws within a reasonable period of time after such changes have taken place.

1. For the purposes of this Convention, unless the context of the Convention is different:

(a) The term ‘Spain’ refers to the territory of the Spanish State, including its territorial sea, in which Spanish laws governing taxation apply, and to any area outside its territorial sea in which Spain has sovereign rights to explore and exploit the resources of the seabed and subsoil and the resources of the superjacent waters in accordance with international law.

(b) The term ‘China’ means the People's Republic of China; used geographically, it designates the entire territory of the People's Republic of China, including its territorial sea in which Chinese laws governing taxation apply, and any area outside its territorial sea, where the People's Republic of China has sovereign rights to exploration and exploitation of seabed and subsoil resources and suprajacent water resources in accordance with international law.

(c) The terms ‘one Contracting State’ and ‘the other Contracting State’ mean Spain or China, depending on the context.

(d) The term 'tax' means the Spanish tax or the Chinese tax, depending on the context.

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

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

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

(h) The term ‘national’ means:

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

(II) All legal persons, Societies of Persons (Partnerships) and Associations which derive their status as such from the Act in force in a Contracting State.

(i) 'international traffic' means any transport by a ship or aircraft operated by an Enterprise whose effective head office (central office) is located in one Contracting State, except where the ship or aircraft is operated only between two points located in the other Contracting State.

(j) ‘competent authority’ means:

(I) In the case of Spain, the Minister of Economy and Finance or his authorised representative.

(II) In the case of China, the Ministry of Finance or its authorised representative.

2. For the purposes of the application of this Convention by a Contracting State, any term not defined in this Convention shall, unless its context indicates a different interpretation, have the meaning attributed to it by the law of that Contracting State concerning the taxes which are the subject of the 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, seat of address or seat of his head office, or any other criterion of a similar nature.

2. Where, under the provisions of paragraph 1, a natural person is a resident of both Contracting States, his or her situation shall be resolved in accordance with the following rules:

(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 it has a permanent dwelling at its disposal in both Contracting States, it shall be considered a resident of the Contracting State with which it maintains closer personal and economic relations (centre of vital interests).

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

(c) If he or she 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 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. Where under the provisions of paragraph 1 a person other than a natural person is resident in both Contracting States, he or she shall be considered a resident of the Contracting State in which his or her effective head office (central office) is located. The competent authorities of the Contracting States shall resolve by mutual agreement any problems arising in relation to this matter.

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) Management offices.

(b) Branches.

(c) Offices.

(d) Factories.

(e) Workshops.

(f) Mines, oil or gas wells, quarries or any other natural resource extraction site.

3. The expression ‘permanent establishment’ also includes:

(a) A construction, installation or assembly work or inspection activities related thereto, but only where such work or activities last for more than six months.

(b) The provision of services, including consultancy services, by an Enterprise of one Contracting State through employees or other contracted personnel, in the other Contracting State, provided that such activities are carried out in connection with the same or related project for a total period or periods exceeding six months within a period of any twelve months.

4. Notwithstanding the previous provisions of this Article, the term ‘permanent establishment’ shall be deemed not to include:

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

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

(c) The maintenance of a deposit of goods or goods belonging to the Enterprise 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 goods or collecting information for the Enterprise.

(e) The maintenance of a fixed place of business for the sole purpose of carrying out any other auxiliary or preparatory activity for the Enterprise.

(f) The maintenance of a fixed place of business for the sole purpose of the combined exercise of the activities referred to in subparagraphs (a) to (c), provided that the whole activity of the fixed place of business retains its auxiliary or preparatory character.

5. By way of derogation from paragraphs 1 and 2, where a person — other than an agent enjoying an independent status, to which the provisions of paragraph 6 apply — acts in a Contracting State on behalf of an Enterprise of the other Contracting State, and habitually possesses and exercises powers enabling him to conclude contracts on behalf of the Enterprise, the Enterprise shall be deemed to have a permanent establishment in the Contracting State referred to first in respect of all activities carried out by that person on behalf of the Enterprise, unless the activities of that person are limited to those referred to in paragraph 4 and if they have been carried out through a fixed place of business, this place would not have been regarded as a permanent establishment, in accordance with the provisions of that paragraph.

6. An Enterprise is not considered to have a permanent establishment in a Contracting State merely because it carries out its activities through a broker, a general commissioner or any other agent enjoying an independent status, provided that such persons act within the ordinary framework of their activity. However, it is not considered that an agent enjoys an independent status within the meaning of this paragraph when the activities of this agent are wholly or almost entirely carried out for the Enterprise, if the transactions between the Enterprise and the agent are not carried out under conditions of free competition.

7. 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 it carries out activities in that other State (whether by permanent establishment or otherwise), does not by itself render any of these Societies permanent establishment of the other State.

1. The income that a resident of one Contracting State obtains from immovable property situated in the other Contracting State may be taxed in that other State.

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

3. The provisions of paragraph 1 apply to income derived from direct use, lease or shareholding, as well as to 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 the immovable property used for the exercise of independent work.

1. The profits of an Enterprise of a Contracting State may be taxed only in that State unless the Enterprise carries out its business in the other Contracting State by means of a permanent establishment situated therein. If the Enterprise carries out its business in such a way, 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, where an Enterprise of one Contracting State carries out its activity in the other Contracting State by means of a permanent establishment situated therein, in each Contracting State the profits which it could 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 permanent establishment and treated 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. However, the amounts paid, if any, by a permanent establishment (except for reimbursement of actual expenses) to the head office or other office of the Enterprise, by way of fees, fees or similar payments, in exchange for the use of patents or other rights, or by way of commissions for specific services provided or by management or, except in the case of a banking undertaking, by way of interest on money lent to the permanent establishment shall not be deductible. Similarly, in determining the benefits of a permanent establishment, account shall not be taken of the amounts charged (except as reimbursement for actual expenses) by the permanent establishment to the head office or other office of the Enterprise, by way of fees, fees or similar payments, in exchange for the use of patents or other rights, or by way of commissions for specific services provided or by management, or except in the case of a Banking Enterprise, by way of interest on money lent to the head office or other office of the Enterprise.

4. As long as it is customary in a Contracting State to determine 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 taxable profits in this manner; 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 or goods for the Enterprise.

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 regulated separately in other articles of this Convention, the provisions of those articles shall not be affected by those of this Article.

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

2. If the seat of effective management (central office) of a Navigational Enterprise is on board a ship, it shall be deemed to be in the Contracting State where the base port of the ship is located, and if there is no such base port, in the Contracting State where the person operating the ship resides.

3. The provisions of paragraph 1 also apply to profits from participation in a pool, on a joint holding or in an international operating body.

When:

(a) an Enterprise of a 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 that differ from those that would be agreed by independent Companies, the profits that would have been obtained by one of the Companies in the absence of these conditions, and which, in fact, have not occurred because of them, may be included in the profits of this Company and subject to taxation accordingly.

1. Dividends paid by a Company resident of one Contracting State to a resident of the other Contracting State may be taxed in 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 laws of that State, but if the recipient of the dividends is the beneficial owner, the tax thus required may not exceed 10 per cent of the gross amount of the dividends.

The competent authorities of the Contracting States shall, by mutual agreement, determine how this limit is 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 means the income from shares or other rights, except credit rights, which permit participation in profits, as well as the income from other social participations subject to the same tax regime as the income from shares under the legislation of the State in which the distribution company resides.

4. The provisions of paragraphs 1 and 2 do not apply if the beneficial owner of the dividends, resident of one 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 located here or provides independent personal services through a fixed basis herewith with which the share generated by the dividends is effectively linked. In such cases, the provisions of article 7 or article 14 apply, as appropriate.

5. Where a Company resident of a Contracting State obtains profits or income from the other Contracting State, that 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 profits 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 gross amount of interest.

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

3. The term ‘interest’ used in this Article means the 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 from bonds and bonds, including premiums and lots attached to such securities, bonds or bonds. Penalties for late payment are not considered as interest for the purposes of this article.

4. The provisions of paragraphs 1 and 2 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 originates, a commercial activity through a permanent establishment situated therein, or provides independent personal services on a fixed basis situated therein, with which the credit generated by the interest is effectively linked. In such a case, the provisions of article 7 or article 14, as appropriate, apply.

5. Interests are considered to come from a Contracting State where the debtor is the State itself, one of its political subdivisions or local entities, or a resident of that State. However, where the debtor of interest, whether or not resident of a Contracting State, has in a Contracting State a permanent establishment or a fixed basis in respect of which the debt giving rise to the payment of the interest has been incurred and bears the burden thereof, the interest shall be regarded as originating in 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 beneficial owner of the interest or of the interest between them and third parties, 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.

1. Fees from one Contracting State and paid to a resident of the other Contracting State may 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 of the interest is the beneficial owner, 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, by mutual agreement, determine how this limit is to be applied.

3. The term ‘royalties’ used in this Article means the amounts of any kind paid for the use or grant of a copyright on a literary, artistic or scientific work, including cinematographic films and films or tapes for broadcasting by radio or television, a patent, a trademark, a design, a plan, a formula or a secret procedure, 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.

4. The provisions of paragraphs 1 and 2 do not apply if the recipient of the royalties, resident of a Contracting State, exercises in the other Contracting State from which the royalties originate, an industrial or commercial activity through a permanent establishment located in that other State or provides independent personal services through a fixed base situated therein, with which the right or ownership for which the royalties are paid is effectively linked. In such cases, the provisions of article 7 or article 14 apply as appropriate.

5. The royalties are considered to come from a Contracting State where the debtor is that Contracting State, a political subdivision, a local entity or a resident of that State. However, where the debtor of the royalties, whether or not he is resident of a Contracting State, has in a Contracting State a permanent establishment or a fixed basis in respect of which the obligation to pay the royalties has been entered into and bear the burden on them, they shall be considered as originating in 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 beneficial owner of the royalties or between them and third parties, the amount of the royalties paid, taking into account the use, right or information for which they are paid, exceeds the amount that would have been agreed by the debtor and the beneficial owner in the absence of such relationships, 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, taking into account the other provisions of this Convention.

1. The profits that a resident of one Contracting State obtains from the disposal of immovable property, as defined in Article 6, located in the other Contracting State, may be taxed in that other Contracting State.

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 independent personal services, including gains arising from the disposal of that permanent establishment (only or with the Enterprise as a whole) or from this fixed basis, may be taxed in that other State.

3. Profits arising from the disposal of ships or aircraft operated in international traffic, or from movable property affected by the operation of such ships or aircraft, may only be taxed in the Contracting State where the effective headquarters (central office) of the Enterprise is located.

4. Profits arising from the disposal of shares representing shares in the capital of a Company, whose assets are constituted, directly or indirectly, mainly by immovable property situated in a Contracting State, may be taxed in that Contracting State.

5. Profits arising from the disposal of shares, other than those referred to in paragraph 4, representing a shareholding of at least 25 per cent in a Company resident in a Contracting State, may be subject to taxation in this Contracting State.

6. Profits obtained by a resident of one Contracting State from the disposal of goods other than those referred to in paragraphs 1 to 5 and from the other Contracting State may be taxed in that other Contracting State.

1. An income obtained by a resident of a Contracting State through the provision of professional services or other activities of an independent nature may only be taxed in that Contracting State except in the case of any of the following circumstances, in which case such income may also be taxed in the other Contracting State:

(a) if that resident has in the other Contracting State a fixed base which he normally has for the pursuit of his activities; in this case, the income may be taxed in that other Contracting State, but only to the extent that it is attributable to that fixed base.

(b) if it remains in the other Contracting State for a total period or periods exceeding one hundred and eighty-three days in the calendar year; in this case, the income may be taxed in that other Contracting State, but only to the extent that it is derived from the activities carried out in that other Contracting State.

2. The term “professional services” includes, in particular, independent scientific, literary, artistic, educational or pedagogical activities, as well as independent activities of Physicians, Lawyers, Engineers, Architects, Dentistry and Accountants.

1. Without prejudice to the provisions of Articles 16, 18, 19, 20 and 21, salaries, salaries and similar remuneration obtained by a resident of a Contracting State on account of employment may only be taxed in this Contracting State unless the employment is exercised in the other Contracting State. If the employment is exercised in the latter State, the remuneration derived therefrom may be taxed in that other Contracting State.

2. Notwithstanding paragraph 1, remunerations obtained by a resident of a Contracting State on account of employment in the other Contracting State may only be taxed in the State referred to above in the first instance if:

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

(b) remuneration is paid by, 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 foregoing provisions of this Article, remunerations earned on account of employment on board a ship or aircraft operated in international traffic may be taxed in the Contracting State where the effective head office (central office) 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 14 and 15, the income which a resident of a Contracting State obtains from the exercise of his personal activity in the other Contracting State as a professional in the performance, theatre, film, radio or television actor, or musician, or as an athlete, may be subject to taxation in that other State.

2. By way of derogation from Articles 7, 14 and 15, where income derived from activities carried out by an artist or sportsman personally and as such is attributed not to the artist or sportsman himself, but to another person, such income may be taxed in the Contracting State in which the activities of the artist or sportsman are carried out.

3. Notwithstanding paragraphs 1 and 2 of this article, income derived from the activities referred to in paragraph 1 and carried out under a cultural convention or an agreement between the Contracting States shall be exempt from taxation in the Contracting State in which the activities are carried out, if the visit to that State is financed, wholly or substantially, by public or governmental funds from any of the Contracting States.

Without prejudice to article 19, paragraph 2, pensions and similar remuneration paid to a resident of a Contracting State on account of previous employment may only be taxed in that State.

1.a) Remunerations, excluding pensions, paid by a Contracting State or one of its political subdivisions or local entities to a natural person, for the purpose of services rendered to that State or to this subdivision or Entity, may only be subject to taxation 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 natural person 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.

(a) Pensions paid by a Contracting State or by one of its political subdivisions or local entities, either directly or from constituted funds, to a natural person on account of services rendered to that State or to this subdivision or entity, 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 natural person is a resident and a national of that other State.

3. The provisions of Articles 15, 16, 17 and 18 apply to remuneration and pensions paid for services rendered in the context of an industrial or commercial activity carried out by a Contracting State or one of its political subdivisions or local entities.

1. The remuneration which a person who is or has been, immediately prior to his arrival in a Contracting State, resident of the other Contracting State, and who is in the State referred to first for the sole purpose of teaching, giving lectures or engaging in research in a School, Institute, University or other institution engaged in education or research officially recognized by the Government of that State, is to receive for such services, is exempt from taxation in that State for a total period not exceeding three years from the date of his arrival in that State.

2. The provisions of paragraph 1 do not apply to income derived from the investigation, where this investigation is not conducted in the public interest but primarily for the particular benefit of a particular person or persons.

1. A student, apprentice or trainees, who is or has been immediately prior to their arrival in a Contracting State resident in the other Contracting State and who is in the State referred to first for the sole purpose of their training or training, shall be exempt from taxation in that Contracting State in respect of:

(a) payments received from the alien for maintenance, study or practice;

(b) Scholarships, grants, awards and awards from governmental, scientific, literary or educational organizations for their maintenance, studies or practices.

2. In relation to the remuneration of a job, a student, apprentice or trainees under the terms of paragraph 1 shall be entitled during the period of their studies or internships to the same exemptions, allowances or tax deductions as are recognized to residents of the State in which they are located.

1. Income obtained by a resident of one Contracting State, not mentioned in the previous articles of this Convention and from the other Contracting State, may be taxed in this other Contracting State.

2. Income obtained by a resident of one Contracting State and from sources outside the other Contracting State may be taxed only in the Contracting State mentioned above.

3. The provisions of paragraph 1 do not apply to income, excluding income derived from property defined as immovable in article 6, paragraph 2, where the recipient of such income, resident of a Contracting State, engages in a commercial or industrial activity in the other Contracting State through a permanent establishment situated therein or provides independent personal services through a fixed base equally situated therein, to which the right or for which the income is paid is effectively linked. In such cases, the provisions of article 7 or article 14 apply, as appropriate.

1. Property consisting of immovable property covered by Article 6 owned by a resident of one Contracting State and located in the other Contracting State may be taxed in that other State.

2. Property consisting of movable property forming part of the asset of a permanent establishment held by an Enterprise of one Contracting State in the other Contracting State, or of movable property belonging to a fixed base for the provision of independent personal services, may be taxed in the Contracting State in which the permanent establishment or fixed base is situated.

3. The assets constituted by ships or aircraft operated in international traffic and by movable property affected by the operation of such vessels and aircraft may be subject to taxation only in the Contracting State in which the effective head office (central office) of the Company is located.

4. Any other element of the estate of a resident of a Contracting State may be subject to taxation only in that State.

1. In Spain, double taxation will be avoided as follows:

(a) Where a resident of Spain obtains income or possesses property elements which, in accordance with the provisions of this Convention, may be taxed in China, Spain, without prejudice to the provisions of subparagraphs (b), (c) and (d), such income and property shall be exempted.

(b) Where a resident of Spain obtains income which, in accordance with the provisions of Articles 10, 11, 12, 16, 17 and 22, may be taxed in China, Spain shall accept as a deduction from the income tax of this person an amount equal to the tax paid in China. Such deduction shall not, however, exceed that part of the Income Tax corresponding to the income that may be taxed in China.

(c) For the purposes of subparagraph (b) and in respect of the income referred to in Articles 10, 11 and 12, an amount equal to 15 per 100 of the gross amount of dividends, 10 per 100 of the gross amount of interest, and 15 per 100 of the gross amount of royalties, shall be considered as a payable Chinese tax.

(d) Where, under any provision of this Convention, income obtained or property held by a resident of Spain is exempt from taxation in Spain, Spain may, however, take into account the income or assets exempted for the purpose of calculating the amount of tax on the rest of the income or assets of that resident.

2. Double taxation in China will be avoided as follows:

(a) Where a resident of China obtains income in Spain, the amount of the income tax to be paid in Spain under the provisions of this Agreement may be deducted from the Chinese tax due by that resident. However, this deduction may not exceed the amount of Chinese income tax calculated in accordance with the rules governing taxation in China.

(b) Where the income obtained in Spain is dividends paid by a company resident in Spain to a company resident in China and holding at least 10 per cent of the shares of the company paying the dividends, the deduction shall take into account the income tax paid in Spain by the company paying the dividends.

1. Nationals 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 other State who are under the same conditions are or may be subject. Notwithstanding article 1, this provision also applies to nationals of any of the Contracting States who are not residents of any of them.

2. Permanent establishments held by an Enterprise of one Contracting State in the other Contracting State shall not be subject to taxation in that other State in a less favourable manner than undertakings 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 reductions it grants to its own residents in view of their marital status or family burdens.

3. Unless the provisions of article 9, article 11, paragraph 6, or article 12, paragraph 6, apply, interest, royalties or other expenses paid by an Enterprise of one Contracting State to a resident of the other Contracting State are deductible, in order to determine the profits subject to taxation of this Enterprise, under the same conditions as if they had been paid to a resident of the State referred to first. Likewise, the debts of an Enterprise of a Contracting State contracted with a resident of the other Contracting State are deductible for the determination of the assets subject to taxation of this Company under the same conditions as if they had been contracted with a resident of the State mentioned first.

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

5. Notwithstanding the provisions of Article 2, the provisions of this Article apply to all taxes, whatever their nature or name.

1. Where a person considers that the measures taken by one or both Contracting States result or may result in an imposition for him that is not in conformity with the provisions of this Convention, irrespective of the remedies provided for by the domestic law of those States, he may submit his case to the competent authority of the Contracting State of which he is resident, or, if article 25, paragraph 1, to that of the Contracting State of which he is a national. The case shall be brought within three years of the first notification of the measure resulting in an imposition not in accordance with the provisions of 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, make every effort to resolve the matter through an amicable agreement with the competent authority of the other Contracting State in order to avoid an imposition which does not comply with the provisions of the Convention. Any agreement reached shall apply irrespective of the time limits laid down by the national law of the Contracting States.

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

4. The competent authorities of the Contracting States may communicate directly with each other in order to reach agreement pursuant to paragraphs 2 and 3. When deemed appropriate for reaching agreement, representatives of the competent authorities of the Contracting States may meet to exchange views orally.

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 the Convention is not contrary to the Convention, in particular to prevent the evasion of such taxes. The exchange of information is not limited by Article 1. Information received by a Contracting State shall be kept secret in the same way as information obtained under the domestic law of that State and shall be communicated only to the persons or authorities (including the courts and administrative bodies) responsible for the management or collection of taxes covered by the Convention, to the declaratory or executive procedures relating to such taxes or to the resolution of appeals relating to such taxes. These persons or authorities shall use these reports only for these purposes. They may disclose such information in public hearings of the Tribunals or in court judgements.

2. In no case may 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) to provide information which 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 the communication of which is contrary to public policy.

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

1. This Convention shall enter into force on the date of the last notification.

2. This Convention shall take effect in respect of income and wealth for tax periods beginning on the first day of January following the day on which the Convention enters into force.

This Convention shall remain in force indefinitely, but any Contracting State may denounce the Convention through diplomatic channels by notifying it in writing until 30 June of any calendar year five years after its entry into force. In such a case this Convention shall cease to have effect in respect of income and wealth for tax periods beginning on the first day of January of the calendar year following that in which the complaint occurred.

Done in duplicate at Beijing on 22 November 1990, in the English, Chinese and Spanish languages, all texts being equally authentic. In the event of differing interpretations, the English text shall prevail.

[heading] PROTOCOL

At the time of the signing of the Agreement between the Government of Spain and the Government of the People's Republic of China to Prevent Double Taxation and Tax Avoidance on Income and Property Taxes, the undersigned have agreed on the following provisions which form an integral part of the Convention:

1. Article 10, paragraph 2, shall not apply, in the case of Spain, to income, whether distributed or not, attributed to members of the Companies and Entities referred to in article 12.2 of Law 44/1978 of 8 September, and article 19 of Law 61/1978 of 27 December, as long as such income is not subject to Spanish Company Tax. Such income shall be subject to Spanish taxation in accordance with its domestic law.

2. In relation to article 12, paragraph 2, of the Convention, fees paid for the use or right to use industrial, commercial or scientific equipment shall be subject to taxation over 60 per cent of the gross amount of fees.

3. The provisions of article 24, paragraph 1 (c), shall apply only during the first 10 years in which this Convention has effect. This period may be extended by agreement of the competent authorities of the Contracting States.

Done at Beijing on 22 November 1990, in duplicate in the English, Chinese and Spanish languages, the three texts being equally authentic. In the event of differing interpretations, the English text shall prevail.

This Convention entered into force on 20 May 1992, the date of the last of the cross-notifications between the parties, informing each other of the fulfilment of their respective constitutional requirements, as set out in Article 29 thereof.

What is made public for general knowledge.

[ignore]Madrid, June 11, 1992.–The Technical Secretary General, Aurelio Pérez Giralda.