Lithuania

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

1. This Convention applies to income and property taxes payable by each Contracting State, its political subdivisions or its local authorities, 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 applies are, in particular:

(a) In Spain:

(i) Personal Income Tax;

(ii) Company Income Tax;

(iii) the non-resident income tax;

(iv) the assets tax;

(v) local income and property taxes;

(hereinafter referred to as the Spanish tax);

(b) in Lithuania:

(i) Income Tax on Legal Persons (juridiniu asmenu pleno mokestis);

(ii) Income Tax for Physical Persons (flziniu asmenu chammu mokestis);

(iii) the tax on companies with public capital (palukanos uz walstybinio kapitalo naudochíma);

(iv) Immovable Property Tax;

(hereinafter referred to as Lithuanian tax).

4. The Convention shall also apply to taxes of an identical or similar nature which are established after the signature of the Convention and which are added to or replaced by existing taxes. The competent authorities of the Contracting States shall communicate to each other any significant amendments to their tax laws.

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

(a) The term ‘Spain’ means the Kingdom of Spain and, used geographically, includes its land, inland waters and territorial sea, as well as maritime areas outside its territorial sea over which, under the national law of the Kingdom of Spain and in accordance with international law, Spain exercises or may exercise rights of sovereignty or jurisdiction;

(b) the term ‘Lithuania’ means the Republic of Lithuania and, used geographically, includes its land, inland waters and territorial sea, as well as maritime areas outside its territorial sea over which Lithuania exercises or may exercise rights of sovereignty or jurisdiction under the national law of the Republic of Lithuania and in accordance with international law;

(c) the terms ‘one Contracting State’ and ‘the other Contracting State’ mean Spain or Lithuania, depending on the context;

(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 which is considered a legal person for tax purposes;

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

(g) 'international traffic' means any transport by a ship or aircraft operated by an undertaking of a Contracting State, except where the ship or aircraft is operated only between points located in the other Contracting State;

(h) the expression ‘competent authority’ means:

(i) In Spain, the Minister of Finance or his authorised representative;

(ii) in Lithuania, the Ministry of Finance or its authorised representative;

(j) the term 'national' means:

(i) a natural person possessing the nationality of a Contracting State;

(ii) a legal person, partnership or association incorporated under the law in force in a Contracting State.

2. For the purposes of the application of the Convention at any time by a Contracting State, any term or expression not defined therein shall have, unless a different interpretation is given in its context, the meaning attributed at that time to it by the law of that State concerning the taxes which are the subject of the Convention, the meaning attributed by the tax law to which it would result from other branches of the law of that State prevails.

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, place of incorporation or any other criterion of a similar nature, and also includes that State, its political subdivisions or its local entities. This term does not, however, include persons who are subject to taxation in that State solely on the income they obtain from sources located in that State, or on the property situated therein.

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 as follows:

(a) Such person shall be considered a resident only of the State in which 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 States, he or she shall be considered a resident only of the State with which he or she has closer personal and economic relations (centre of vital interests);

(b) If it is not possible to determine the State in which the person has the centre of his or her vital interests, or if he or she does not have permanent housing at his or her disposal in any of the States, he or she shall be considered a resident only of the State in which he or she habitually lives;

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

(d) if he is a national of either State or is not a national of either 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 a resident of both Contracting States, the competent authorities of the Contracting States shall make every effort to resolve the case through mutual agreement procedure, taking into account the place where the place of effective management is located, the place of incorporation and any other relevant economic and material factors. If an agreement is not reached, that person shall not be entitled to benefit from the benefits provided for in this Agreement for the purposes of this Agreement.

1. For the purposes of this Agreement, the term ‘permanent establishment’ means a fixed place of business through which an undertaking 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; and

(f) mines, oil or gas wells, quarries or any other place of extraction of natural resources.

3. A work, a construction, installation or assembly project or related supervisory activities constitute a permanent establishment only where such work, project or activity lasts more than nine months.

4. Notwithstanding the previous provisions of this Article, it is considered that the term ‘permanent establishment’ does not include:

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

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

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

(d) the maintenance of a fixed place of business for the sole purpose of buying 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 undertaking;

(f) the maintenance of a fixed place of business for the sole purpose of carrying out any combination of the activities referred to in subparagraphs (a) to (e), provided that the whole activity of the fixed place of business resulting from that combination retains its auxiliary or preparatory character.

5. By way of derogation from paragraphs 1 and 2, where a person, other than an independent agent to whom paragraph 6 applies, acts on behalf of an undertaking and has and exercises habitually in a Contracting State powers to conclude contracts on behalf of the undertaking, that undertaking shall be deemed to have a permanent establishment in that State in respect of the activities carried out by that person for the undertaking, 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, they have not determined that such a fixed place of business is 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 in that State through a broker, a general commissioner or any other independent agent, provided that such persons act within the ordinary framework of their activity.

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 engages in business activities in that other State (whether by permanent establishment or otherwise), does not by itself render any of these companies permanent establishment of the other State.

1. Income from immovable property (including income from agricultural or forestry holdings) situated in the other Contracting State may be taxed in that other Contracting State.

2. The term ‘real property’ shall have the meaning attributed to it by the law of the Contracting State in which the property is situated. The provisions of this Convention relating to immovable property shall also apply to attachments to immovable property, livestock and equipment used on agricultural and forestry holdings, the rights to which the provisions of private law relating to real estate, the use of immovable property and the right to receive fixed or variable payments in exchange for exploitation, or the granting of exploitation, of mineral deposits, sources and other natural resources. Ships and aircraft shall not be regarded as immovable property.

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

4. Where ownership of shares in a company or other corporate rights confers on the owner of such shares or corporate rights the right to the enjoyment of immovable property held by the company, the income derived from the direct use, lease or use in any other form of such right of enjoyment may be taxed in the Contracting State in which the immovable property is situated.

5. The provisions of paragraphs 1, 3 and 4 shall also apply to income derived from the immovable property of an undertaking and from immovable property used for the provision of independent personal services.

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

2. Without prejudice to the provisions of paragraph 3, where an undertaking of one Contracting State carries out its business in the other Contracting State by means of a permanent establishment situated therein, in each Contracting State the profits which it would have obtained from being a separate and separate undertaking carrying out the same or similar activities shall be attributed to that permanent establishment under the same or similar conditions and shall deal entirely independently with the undertaking from which it is a permanent establishment.

3. For the purpose of determining the benefit of permanent establishment in a Contracting State, the deduction of expenses (other than those which would not be deductible if such permanent establishment were an independent enterprise of that Contracting State) incurred for the purposes of permanent establishment, including management and general administrative expenses for the same purposes, whether they are incurred in the Contracting State where the permanent establishment is located or elsewhere.

4. No profits shall be attributed to a permanent establishment by reason of the mere purchase of goods or goods by that permanent establishment for the enterprise.

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

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

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

2. The provisions of paragraph 1 also apply to the benefits of participation in a pool, in a joint holding or in an international operating body.

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 which would be agreed by independent undertakings, the profits which would have been obtained by one of the undertakings in the absence of such conditions, and which in fact have not been made because of them, may be included in the profits of that undertaking and may be taxed accordingly.

2. Where a Contracting State includes in the profits of an enterprise of that State - and consequently subject to taxation - the profits on which an enterprise of the other Contracting State has been taxed in that other State, and the profits thus included are profits that would have been realized by the enterprise of the State mentioned first if the terms agreed between the two companies had been those agreed between independent companies, that other State shall effect the adjustment that would have been made to the amount of the tax that has taxed those profits. In determining such adjustment, account shall be taken of the other provisions of this Convention and the competent authorities of the Contracting States shall be consulted if 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.

2. However, such 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 beneficial owner of the dividends is a resident of the other Contracting State, the tax thus required may not exceed:

(a) 5 per cent of the gross amount of dividends if the beneficial owner is a company (other than a company of persons) holding directly at least 25 per cent of the capital of the company that pays the dividends;

(b) 15 per cent of gross dividends in all other cases.

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

3. The term dividends within the meaning of this article means the income from shares, shares or enjoyment bonds, parts of mines, parts of founders or other rights that allow participation in profits, except credit, as well as income from other social participations subject to the same tax regime as the income from shares under the law of the State of which the distribution company is resident.

4. The provisions of paragraphs 1 and 2 do not apply if the beneficial owner of the dividends, resident of one Contracting State, performs in the other Contracting State, of which the corporation paying the dividends is resident, a business activity through a permanent establishment located there, or provides in that other State independent personal services through a fixed base situated there, and the share generated by the dividends is effectively linked to that permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as appropriate, apply.

5. Where a company resident of one 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 such 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 located in that other State, or subject the undistributed profits of the company to a tax on them, even if the dividends paid or the undistributed profits 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, such interest may also be taxed in the Contracting State from which it comes and in accordance with the law of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax thus required may not exceed 10 per cent of the gross amount of interest.

3. Notwithstanding the provisions of paragraph 2:

(a) Interest from a Contracting State obtained by the other Contracting State and of which the other Contracting State is an effective beneficiary, including its political subdivisions and local entities, the Central Bank or any financial institution wholly controlled by that other State, or interest paid on a loan secured by that other State, subdivision, entity or public institution, acting in the context of the promotion of export to which it has been reached by mutual agreement of the competent authorities of the Contracting States, shall be exempt from taxation in the State referred to first;

(b) interest from a Contracting State shall be exempt from taxation in that State if the beneficial owner of such interest is an enterprise of the other Contracting State, and the interest is paid on account of a debt arising as a result of the sale on credit by an enterprise of that other State of any industrial, commercial or scientific goods or equipment to an enterprise of the State mentioned first, except where the sale is made, or the debt is contracted, between related persons.

4. The term ‘interest’ within the meaning of this Article means income from claims of any kind, with or without a mortgage guarantee or benefit-sharing clause of the debtor, and in particular income from public securities and income from bonds or bonds, including premiums and lots attached to such securities, as well as any other income subject to the same regime as income from capital provided by the tax legislation of the other State from which the income comes. However, the term ‘interest’ does not include income considered as dividends under Article 10. Penalties for late payment are not considered interest for the purposes of this article.

5. The provisions of paragraphs 1, 2 and 3 do not apply if the beneficial owner of the interest, resident of one Contracting State, carries out in the other Contracting State, from which the interest is derived, a business activity through a permanent establishment located in that other State or provides independent personal services through a fixed base located in that other State, and the credit generated by the interest is effectively linked to that permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14 shall apply, as appropriate.

6. Interest shall be considered as originating in a Contracting State where the debtor is 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 and bearing the burden of the interest has been incurred, interest shall be deemed to have come from the Contracting State where the permanent establishment or fixed base is located.

7. Where, by reason of the special relations between the debtor and the beneficial owner of the interest, or of which both have with third parties, the amount of interest in the light of the receivable for which it is paid exceeds that agreed upon 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 such a 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, such 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 beneficial owner of the royalties is a resident of the other Contracting State the tax thus required may not exceed:

(a) 5 per cent of the gross amount of fees paid for the use of industrial, commercial or scientific equipment;

(b) 10 per cent of the gross amount of royalties in all other cases.

3. The term ‘royalties’ used in this Article means the quantities of any kind paid for the use or granting of copyright on literary, artistic or scientific works, including cinematographic films and films or tapes or any other method of reproduction of the image or sound for radio or television broadcasting, patents, trademarks, designs, plans, formulas or secret procedures, or 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 beneficial owner of the royalties, resident of one Contracting State, carries out in the other Contracting State, from which the royalties come, a business activity through a permanent establishment located in that other State or provides independent personal services through a fixed base located in that other State, and the right or for which the royalties are paid is effectively linked to that permanent establishment or fixed base. In such cases, the provisions of Article 7 or Article 14 shall apply, as appropriate.

5. Fees shall be deemed to come from a Contracting State where the debtor is a resident of that State. However, where the debtor of the royalties, whether or not he is a resident of a Contracting State, has in one of the Contracting States a permanent establishment or a fixed basis in respect of which the obligation to pay the royalties has been incurred and which bear the burden thereof, such fees shall be deemed to come from the 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 of those between them and third parties, the amount of the royalties, taking into account the use, right or information for which they are paid, exceeds that for which the debtor and beneficial owner would have agreed in the absence of such relationships, the provisions of this article shall apply only to the latter amount. In such a 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. Gains that a resident of a Contracting State obtains from the disposition of immovable property as defined in article 6, located in the other Contracting State, or from the disposition of shares of a corporation whose assets consist mainly of such property, may be subject to taxation in that other State.

2. Gains from the disposal of movable property forming part of the assets of a permanent establishment held by an enterprise of one Contracting State in the other Contracting State, or from movable property belonging to a fixed basis owned by a resident of one Contracting State in the other Contracting State for the provision of independent personal services, including gains from the disposal of such permanent establishment (only or with the enterprise as a whole) or from that fixed basis, may be taxed in that other State.

3. Profits obtained by an enterprise of a Contracting State operating ships or aircraft in international traffic, from the alienation of ships or aircraft operated in international traffic, or from movable property affected by the operation of such vessels or aircraft, may only be taxed in that State.

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 in which the transferor resides.

1. Income earned by a natural person who is a resident of a Contracting State for the provision of professional services or other activities of an independent nature may only be taxed in that State unless that person normally has a fixed basis in the other Contracting State for carrying out his or her activities. If it has such a fixed base, the income may be taxed in the other State, but only to the extent that it is attributable to that fixed base. For this purpose, where a natural person resident of one Contracting State remains in the other Contracting State for a period or periods of a total duration of 183 days in any twelve-month period beginning or ending in the fiscal year concerned, it shall be deemed to have a fixed base in that other State on a regular basis and the income derived from the activities referred to above in that other State shall be attributed to that fixed base.

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.

1. Without prejudice to articles 16, 18, 19 and 20, salaries, wages and other similar remuneration obtained by a resident of a Contracting State on the basis of employment may only be subject to taxation in that State unless the employment takes place in the other Contracting State. If the employment is carried out in this way, the remuneration derived therefrom may be subject to taxation in that other State.

2. By way of derogation from 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 State referred to first, if:

(a) The recipient remains in the other State for a period or periods of not more than 183 days together in any twelve-month period beginning or ending in the fiscal 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 preceding provisions of this article, remunerations earned on account of employment on board a ship or aircraft operated in international traffic by an undertaking of a Contracting State may be subject to taxation in that State.

Shareholdings and similar remunerations obtained by a resident of a Contracting State as a member of a Board of Directors or similar body of a company resident of the other Contracting State may be taxed in that other State.

1. Notwithstanding the provisions of articles 14 and 15, the rents which a resident of a Contracting State obtains from the exercise of his personal activity in the other Contracting State as a performer, theatre, cinema, radio or television actor, or musician, or as an athlete, may be subject to taxation in that other State.

2. Notwithstanding the provisions of Articles 7, 14 and 15, where the income derived from the activities carried out by an artist or athlete personally and in that capacity is attributed, not to the artist or athlete himself but to another person, such income may be taxed in the Contracting State in which the activities of the artist or athlete are carried out.

Without prejudice to Article 19(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) Salaries, wages and other similar salaries, excluding pensions, paid by a Contracting State or one of its political subdivisions or local entities to a natural person for services rendered to that State or to that subdivision or entity, may only be subject to taxation in that State.

(b) Such salaries, salaries and similar remuneration may, however, 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) is a national of that State; or

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

2. (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 that subdivision or entity, may only be subject to taxation in that State.

(b) Such pensions may, however, be subject to taxation in the other Contracting State only if the natural person is a resident and a national of that State.

3. Articles 15, 16, 17 and 18 apply to salaries, salaries and other similar remunerations, and pensions, paid for services rendered in the context of an entrepreneurial activity carried out by a Contracting State or by one of its political subdivisions or local authorities.

The amounts received to cover the costs of maintenance, study or practical training by a student, apprentice or trainees who is, or was, immediately before arriving in a Contracting State, resident of the other Contracting State and who is in the State referred to first for the sole purpose of continuing his studies or practical training, may not be subject to taxation in that State provided that they come from fronts outside that State.

1. The provisions of this Article apply irrespective of the provisions of Articles 4 to 20 of this Convention.

2. For the purposes of this Article, the expression ‘activities on the high seas’ means activities carried out on the high seas in a Contracting State related to the exploration or exploitation of the seabed, the subsoil and its natural resources located in that State.

3. Without prejudice to paragraph 4, a resident of a Contracting State operating on the high seas in the other Contracting State is deemed to be engaged in a business activity in that other State through a permanent establishment or a fixed base situated on the other Contracting State.

4. The provisions of paragraph 3 shall not apply where activities on the high seas take place over a period or periods of not more than 30 days in any period of 12 months. For the purposes of this paragraph:

(a) activities on the high seas carried out by a person associated with another person shall be deemed to be carried out by that other person where those activities are substantially the same as those carried out by the person mentioned first, except to the extent that such activities are carried out at the same time as his own activities;

(b) a person is considered to be associated with another person when one is controlled directly or indirectly by the other person, or both are controlled directly or indirectly by a third person or persons.

5. Salaries, salaries and other similar remunerations obtained by a resident of one Contracting State on account of employment related to activities on the high seas in the other Contracting State may be taxed in that other State to the extent that the activity takes place on the high seas in that other State. However, such remuneration may be subject to taxation in the above-mentioned State only if the employment is exercised for an employer who is not a resident of the other State, and for a period or periods not to exceed a total of 30 days in any twelve-month period.

6. The earnings of a resident of a Contracting State from the disposal of:

(a) The rights to exploration or exploitation; or

(b) the property located in the other Contracting State used in connection with activities on the high seas carried out in that other State; or

(c) shares whose value or most of it derives directly or indirectly from such rights or assets, or from those rights and assets considered jointly, may be taxed in that other State.

In this subparagraph, the term ‘rights of exploration or exploitation’ means the right to assets originating in activities on the high seas carried out in the other Contracting State, or to participation in or benefit from such assets.

1. The income of a resident of a Contracting State, whatever its source, not referred to in the previous articles of this Convention, shall be subject to taxation only in that State.

2. Paragraph 1 does not apply to income, other than that derived from immovable property within the meaning of Article 6(2), where the beneficiary of such income, resident of a Contracting State, carries out in the other Contracting State an entrepreneurial activity through a permanent establishment situated in that other State or provides independent personal services through a fixed base situated in that other State, and the right or for which the income is paid is effectively linked to that permanent establishment or fixed base. In such a case, the provisions of Article 7 or Article 14, as appropriate, apply.

1. Property constituted by immovable property within the meaning of article 6, which is owned by a resident of one Contracting State and situated in the other Contracting State, may be taxed in that other State.

2. Property consisting 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 of movable property belonging to a fixed basis which a resident of one Contracting State has in the other Contracting State for the provision of independent personal services, may be subject to taxation in that other State.

3. The assets of an enterprise of a Contracting State consisting of ships or aircraft operated in international traffic by that enterprise, as well as movable property affected by the operation of such vessels and aircraft, may only be taxed in that State.

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

Double taxation shall be avoided as follows:

1. In Spain:

In accordance with the provisions, and without prejudice to the limitations imposed by Spanish law:

(a) Where a resident of Spain obtains income or possesses assets which, in accordance with the provisions of this Convention, may be taxed in Lithuania, Spain shall permit:

(i) The deduction of the income tax of that resident in an amount equal to the income tax paid in Lithuania;

(ii) the deduction of the tax on the assets of that resident in an amount equal to the tax paid in Lithuania on the same assets;

(iii) the deduction of corporation tax actually paid by the company distributing the dividends, corresponding to the profits from which the dividends are paid, shall be granted in accordance with Spain's domestic law.

However, such deduction may not exceed the part of the income or property tax, calculated before the deduction, corresponding to the income or to the same assets, as appropriate, which may be taxed in Lithuania.

(b) Where, under any provision of this Agreement, the income obtained by a resident of Spain or the property he holds is tax-exempt in Spain, Spain may, however, take into account the income or wealth exempted in calculating the tax on the rest of the income or property of that resident.

2. In Lithuania:

Where a resident of Lithuania obtains income or owns assets which may be taxed under this Convention in Spain, Lithuania shall, unless its domestic legislation contains more favourable treatment:

(a) The deduction of the income tax of that resident in the amount equal to the income tax paid in Spain on the basis of that income tax;

(b) the deduction of the tax on the assets of that resident in the amount equal to the tax on the assets paid in Spain on the basis of that tax.

However, in any event, such deduction may not exceed the part of the income tax or of the Lithuanian assets, calculated before the deduction, corresponding to the income or assets, as appropriate, which may be taxed in Spain.

1. Nationals of one Contracting State shall not be subject in the other Contracting State to any taxes or obligations relating thereto which are different or more burdensome than those to which nationals of that other State who are under the same conditions, in particular with regard to residence, are or may be subject. Notwithstanding article 1, this provision shall also apply to persons who are not residents of one or any of the Contracting States.

2. Permanent establishments held by an enterprise of one Contracting State in the other Contracting State shall not be subject to taxation in that State in a less favourable manner than undertakings of that other State carrying out the same activities. This provision may not 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(1) of Article 11(7) or Article 12(6) apply, interest, royalties and other expenses paid by an undertaking of a Contracting State to a resident of the other Contracting State shall be deductible to determine the profits subject to taxation of that undertaking 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 one Contracting State to a resident of the other Contracting State shall be deductible for the determination of the assets subject to taxation of that enterprise, under the same conditions as if they had been contracted with a resident of the State referred to first.

4. Enterprises of a Contracting State whose capital is wholly or partly owned or controlled 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 in the first instance are or may be subject.

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

1. Where a person considers that the measures taken by one or both Contracting States involve or may entail for him an imposition 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 (1) applies, to that of the Contracting State of which he is a national. The case must arise within three years of the first notification of the measure involving 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 itself able to reach 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 not in conformity with this Convention. The agreement 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 any difficulties or 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. In order to reach agreement within the meaning of the preceding paragraphs, the competent authorities of the Contracting States may communicate directly, including within a Joint Committee composed of themselves or their representatives.

1. The competent authorities of the Contracting States shall exchange the information necessary to implement the provisions of this Convention, or of the national law of the Contracting States relating to taxes covered by the Convention to the extent that such taxation is not contrary to the Convention. The exchange of information shall not be limited by Article 1. Information received by a Contracting State shall be kept secret in the same manner as information obtained on the basis of the domestic law of that State and shall only be communicated to the persons or authorities (including administrative courts and bodies) responsible for the management or collection of taxes covered by the Convention, the declaratory or executive procedures relating to such taxes, or the resolution of appeals relating thereto. Such persons or authorities shall use this information only for these purposes. They may disclose the information at public court hearings or in court judgements.

2. In no case may the provisions of paragraph 1 be interpreted as obliging one of the Contracting States to:

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

(b) to provide information that cannot be obtained by virtue of its own legislation or in the exercise of its normal administrative practice, or by the other Contracting State;

(c) provide information revealing trade, industrial or professional secrets, commercial procedures or information whose communication is contrary to public policy (ordre public).

The provisions of this Convention shall not affect the tax privileges enjoyed by members of diplomatic missions or consular offices in accordance with the general principles of international law or under the provisions of special agreements.

1. Each Government of the Contracting States shall notify the other that the domestic legal procedures for the entry into force of this Convention have been complied with.

2. The Convention shall enter into force on the date of receipt of the last notification referred to in paragraph 1 and its provisions shall apply in both Contracting States:

(a) With regard to taxes withheld at source, income obtained from 1 January inclusive of the calendar year following the year in which the Convention enters into force;

(b) in respect of other taxes on income and property taxes, on taxes payable in tax periods beginning on or after 1 January of the calendar year following that in which the Convention enters into force.

The Convention shall remain in force as long as it is not denounced by one of the Contracting States. Any Contracting State may denounce the Convention by diplomatic means, notifying it in writing at least six months before the end of any calendar year. In such a case, the Convention shall cease to have effect in both Contracting States:

(a) With regard to taxes withheld at source, on income obtained from 1 January inclusive of the calendar year following that in which the complaint was notified;

(b) in respect of other taxes on income or property taxes, on taxes payable in tax periods beginning on or after 1 January of the calendar year following that in which the complaint was notified.

In faith, the signatories, duly authorized to do so, have signed this Convention.

Done in duplicate in Madrid on 22 July 2003, in the English, Lithuanian and Spanish languages, the three texts being equally authentic. In the event of a divergence between any of the texts, the English text shall prevail.

[heading] PROTOCOL

At the time of signing the Convention between the Kingdom of Spain and the Republic of Lithuania to prevent double taxation and to prevent tax evasion in respect of income and property taxes, the signatories have agreed on the following provisions which form an integral part of the Convention.

I. With reference to Article 2(2).

Taxes on the amount of wages or salaries paid by undertakings shall also be deemed to be income taxes, excluding social security contributions and any other share of a similar nature.

II. With reference to Article 2(4).

In the case of the introduction into Lithuania of a local tax, the provisions of this Convention shall also be deemed to apply to that tax.

III. With reference to Article 4(3).

The provisions of paragraph 3 shall be deemed to apply in so far as for the determination of the place of residence the criterion of the place of effective management is not used in accordance with the provisions of Lithuanian domestic law. In the case of the application of that criterion, the competent authorities of Lithuania shall inform as soon as that criterion applies to the Spanish competent authorities and, from the earliest possible date, as determined by the competent authorities of both Contracting States, the following provisions shall apply instead of paragraph 3:

‘3. Where under the provisions of paragraph 1 a person other than a natural person is a resident of both Contracting States, he shall be considered a resident of the State in which his place of effective management is located.’

IV. With reference to Article 5(3).

If in a Convention for the Prevention of Double Taxation signed after the signature of this Convention between Lithuania and a third State which at the time of signature of that Convention was a member of the Organisation for Economic Cooperation and Development, Lithuania agrees a period of more than nine months or a definition in which no reference is made to a draft assembly, with the same period of duration as provided for in that paragraph, that period or definition shall automatically apply to this Convention as if expressly stated in paragraph 3, and shall take effect from the last of these two dates: the period in which the provisions of that Convention take effect or in which the provisions of this Convention take effect.

V. With reference to Article 6(2).

The term ‘real estate’ shall be understood to include options (agreements guaranteeing the right, without imposing any obligation, to acquire or dispose of immovable property for a fixed price and within a specified time period).

VI. With reference to Article 6(3).

All proceeds and gains arising from the disposal of immovable property referred to in article 6 and located in a Contracting State shall be deemed to be subject to taxation in that State in accordance with article 13.

VII. With reference to articles 10, 11, 12 and 13.

(a) Notwithstanding the provisions of this Agreement, a company resident in a Contracting State in which non-resident members of that State participate, directly or indirectly, in more than 50 per cent of the share capital, shall not be entitled to the tax exemptions provided for in this Agreement in respect of dividends, interest, royalties and capital gains from the other Contracting State. This provision shall not apply where such company carries out substantive business transactions, other than the mere holding of shares or assets, in the Contracting State of which it is resident.

(b) A company which, under the preceding heading, is not entitled to the benefits of the Convention in respect of the above categories of income could nevertheless obtain such benefits if the competent authorities of the Contracting States agree, in accordance with article 26 of this Convention, that the incorporation of the company and the conduct of its operations are based on sound business reasons and therefore have no primary purpose in obtaining such benefits.

VIII. With reference to Article 11(2) and (3).

If in a Convention for the Prevention of Double Taxation signed after the signature of this Convention between Lithuania and a third State which, at the time of signature of that Convention, was a member of the Organisation for Economic Cooperation and Development, Lithuania agrees to exemption from interest from Lithuania, other than those referred to in paragraph 3, or a rate of taxation on interest less than that set out in paragraph 2, then such exemption or tax rate shall automatically apply to this Convention as if expressly stated in paragraph 3 or paragraph 2 respectively, and shall take effect from the last of these two dates: the date on which the provisions of that Convention take effect or on which the provisions of this Convention take effect.

IX. With reference to Article 19(2) and (3).

If in a Convention for the Prevention of Double Taxation signed after the signature of this Convention between Lithuania and a third State which at the time of signature of that Convention was a member of the Organisation for Economic Cooperation and Development, Lithuania agrees on a definition of royalties excluding any right or other property contained in paragraph 3, exemption from Lithuanian tax on royalties from Lithuania, or application of lower tax rates than those laid down in paragraph 2, such definition, exemption or lower rate shall automatically apply to this Convention as if expressly stated in paragraph 3 or in paragraph 2 respectively, and shall take effect from the last of these two dates: where the provisions of that Convention take effect or where the provisions of this Convention take effect.

X. With reference to Article 13(1).

For the purposes of this paragraph, the assets of the company do not include those immovable property in which the company carries out its activity, except those under lease.

IN WITNESS WHEREOF, the signatories, duly authorized to that effect, have signed this Protocol.

Done in duplicate in Madrid, 22 July 2003, in the English, Lithuanian and Spanish languages, the three texts being equally authentic. In the event of a divergence between any of the texts, the English text shall prevail.

This Convention entered into force on 26 December 2003, the date of receipt of the last notification of compliance with domestic legal procedures, as set out in its Article 29.

What is made public for general knowledge.

[ignore]Madrid, January 9, 2004.–The Technical Secretary General, Julio Núñez Montesinos.