Costa Rica

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

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

2. Income and property taxes are those that tax all or any part of the income or property, including taxes on profits arising from the disposal of movable or immovable property, taxes on the amount of wages or salaries paid by enterprises, 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) corporation tax;

(iii) non-resident income tax;

(iv) Property Tax; and

(v) Local income and property taxes;

(b) In Costa Rica:

(i) Income taxes; and

(ii) Taxes on Heritage.

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 amendments made to their respective tax laws.

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

(a) the term ‘Spain’ means the Spanish State and, used geographically, means the territory of the Spanish State, including areas outside its territorial sea in which, under international law and under its domestic law, the Spanish State exercises or may exercise in the future jurisdiction or rights of sovereignty over the seabed, its subsoil and superjacent waters, and its natural resources;

(b) the term ‘Costa Rica’ means the territory and airspace and maritime areas, including the subsoil and seabed adjacent to the outer limit of the territorial sea, over which it exercises or may exercise sovereign rights, in accordance with international law and its domestic law, with respect to the natural resources of these areas.

(c) the terms ‘one Contracting State’ and ‘the other Contracting State’ mean Spain or Costa Rica, 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 carried out by a ship or aircraft operated by an undertaking of a Contracting State, except where such transport takes place exclusively between points situated in the other Contracting State;

(h) the expression ‘competent authority’ means:

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

(ii) in Costa Rica, the Minister of Finance or his authorised representative.

(i) the term 'national' means:

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

(ii) a legal person, partnership or association incorporated in accordance with 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 in the Convention 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 or any other criterion of a similar nature, including also that State and its political subdivisions or 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 resident in both Contracting States, his or her situation shall be resolved as follows:

(a) Such person shall be considered a resident of the State where he or she has permanent housing at his or her disposal; if he or she has permanent housing at his or her disposal in both States, he or she shall be considered a resident of the State with which he or she has closer personal and economic relations (centre of vital interests);

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

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

(d) if he is a national of both States 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, he shall be considered a resident of the State in which his place of effective management is located.

1. For the purposes of this Agreement, the term ‘permanent establishment’ means a fixed place of business through which an undertaking carries out all or part of its activity.

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

(a) the head offices;

(b) branches;

(c) Offices;

(d) factories;

(e) workshops; and

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

3. A work or a construction or installation project only constitutes a permanent establishment if its duration exceeds 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 undertaking;

(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 which 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 the consideration of that fixed place of business as a permanent establishment in accordance with the provisions of that paragraph.

6. An undertaking 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 make 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. In any event, that term includes property attached to immovable property, livestock and equipment used on agricultural and forestry holdings, the rights to which private law provisions relating to real estate apply, 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, vessels 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. The provisions of paragraphs 1 and 3 also apply to income derived from the immovable property of an undertaking.

5. Where ownership of shares or other corporate rights in a company directly or indirectly assigns to 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 subject to taxation in the Contracting State in which the immovable property is situated.

1. The profits of an undertaking in a Contracting State may be taxed only in that State unless the undertaking carries out its business in the other Contracting State through a permanent establishment situated 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 a 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 it could 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 the permanent establishment, the deduction of expenses incurred for the purposes of the permanent establishment shall be permitted, including management and general administrative expenses for the same purposes, whether incurred in the State in which 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 covered separately by other articles of this Convention, the provisions of those articles shall not be affected by those of this Article.

1. Profits from the activities of ships or aircraft in international traffic may be taxed only in the Contracting State of which the undertaking conducting such activities is resident.

2. The provisions of paragraph 1 also apply to profits from participation in a pool, on a joint holding or on 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 a 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 subjects to taxation - the profits on which an enterprise of the other State has been taxed in that other Contracting State, and that other State recognizes that the profits thus included are profits that would have been realized by the enterprise of the State concerned in the first place if the terms agreed between the two companies had been those agreed between independent companies, that other State shall make the adjustment that would result in 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 where 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 subject to taxation 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 100 of the gross amount of dividends if the beneficial owner is a company (excluding companies of persons) holding directly at least 20 per 100 of the capital of the company paying the dividends.

(b) 12 per 100 of the gross amount of dividends in other cases.

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

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, except credit rights, which allow participation in profits, as well as income from other social shares 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, carries out in the other Contracting State, of which the company paying the dividends is resident, a business activity through a permanent establishment or provides independent professional services through a fixed basis situated in that other State, 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 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 situated 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.

6. The profits of a company of a Contracting State operating in the other Contracting State through a permanent establishment situated therein may, after being subject to taxation pursuant to Article 7, be taxed on the remaining amount in the Contracting State in which the permanent establishment is situated and in accordance with the law of that State, but in such case this tax may not exceed 5 per cent.

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:

(a) 5 per cent of the gross amount of interest, where the duration of the loan is 5 years or more.

(b) 10 per cent of the gross amount of interest, in other cases.

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

3. Notwithstanding the provisions of paragraph 2, interest from one Contracting State and paid to a resident of the other Contracting State may be taxed in that other State only if the recipient of the interest is its beneficial owner and:

(a) the beneficial owner is a Contracting State, one of its political subdivisions or one of its local entities; or

(b) interest is paid in connection with the sale on credit of goods or equipment to an undertaking of a Contracting State; or

(c) interest is paid by credit granted by a bank or by another credit institution resident in a Contracting State.

4. The term ‘interest’ within the meaning of this Article means income from claims of any kind, with or without a mortgage guarantee or a 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 State from which the income comes. Penalizations 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 professional services through a fixed basis 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 is considered to come from 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, the interest shall be deemed to have come from the Contracting State where the permanent establishment or fixed base is situated.

7. Where due to special relations between the debtor and the beneficial owner, or between them and third parties, the amount of interest in the light of the claim for payment exceeds that agreed by the debtor and the creditor in the absence of such relationships, the provisions of this article shall apply only to the latter amount. In 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 10 per cent of the gross amount of the fees paid.

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

3. The term ‘royalties’ within the meaning of this Article means the quantities of any kind paid for the use, or the granting of use, of copyrights in literary, artistic or scientific works, including cinematographic films or films, tapes and other means of reproduction of the image and sound, patents, trademarks or trade marks, designs, plans, formulas or secret procedures, or for the use, or the right to use industrial, commercial or scientific equipment, or for information relating to industrial, commercial or scientific experience, as well as financial or administrative technical advice.

4. The provisions of paragraph 1 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, an industrial or commercial activity through a permanent establishment located in that other State or provides independent professional services through a fixed basis in that other State, and the right or for which the royalties are paid is effectively linked to that permanent establishment or to that 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 bears the burden thereof, such royalties shall be deemed to have 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. 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 State.

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

3. Profits arising from the disposal of ships or aircraft operated by an undertaking of a Contracting State in international traffic or from movable property affected by the operation of such vessels or aircraft may be taxed only in the Contracting State of which the undertaking is resident.

4. Profits that a resident of one Contracting State obtains from the disposal of shares whose value is derived directly or indirectly from more than 50 per cent of immovable property located in the other Contracting State may be taxed in that other State.

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

1. Income earned by a natural person resident of a Contracting State in respect of professional services or other independent activities carried out in the other Contracting State may be taxed in the latter State, but the tax payable shall not exceed 10 per cent of the gross amount received for such services or activities, except in the case where the latter resident has a fixed base in the other Contracting State for the purpose of carrying out his activities. In the latter case, such income shall be subject to taxation in that other State in accordance with its domestic law, to the extent that it can be attributed to that fixed base.

2. The expression ‘personal services’ includes independent, scientific, literary, artistic, educational or educational activities, as well as independent activities of doctors, lawyers, engineers, architects, dentists and accountants.

1. Without prejudice to Articles 16, 17, 18 and 19, salaries, salaries and other similar remuneration obtained by a resident of a Contracting State on account of employment may be subject to taxation in that State only unless the employment is exercised in the other Contracting State. If the employment is thus exercised, the remuneration derived therefrom may be subject to taxation in that other State.

2. By way of derogation from paragraph 1, remuneration obtained by a resident of a Contracting State on the basis of employment in the other Contracting State may be taxed only in the State referred to above 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 by employment on board a ship or aircraft operated by an undertaking of a Contracting State in international traffic may be subject to taxation in that State.

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

1. 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 performer, theatre, film, 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 personal activities of the performers or sportsmen, in that capacity, is attributed not to the performer himself or to another person, such income may be taxed in the Contracting State where the activities of the performer or sportsperson are carried out.

3. Notwithstanding the provisions of paragraph 1, income derived from the activities referred to in that paragraph and carried out under a cultural or sporting agreement or 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, in whole or in substance, by public funds of the other Contracting State or one of its political subdivisions or local entities.

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 remuneration, excluding pensions, paid by a Contracting State or by 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.

(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 to pensions paid for services rendered in the context of an enterprise carried out by a Contracting State or by one of its political subdivisions or local authorities.

1. The remuneration of a person, resident of a Contracting State, temporarily staying for a period not exceeding two years in the other Contracting State to teach, lecture or engage in scientific research in a school, institute, university or other officially recognized educational or scientific research institution, may be subject to taxation only in the first State.

2. The amounts received to cover the costs of maintenance, study or practical training by a student or a 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 sources outside that State.

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.

Notwithstanding the above, gains obtained through official lotteries may be taxed in the Contracting State where they are obtained.

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 professional services through a fixed basis in that other State, and the right or for which the income is paid is effectively linked to that permanent establishment or to that 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 has a resident of one Contracting State and is 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 undertaking of one Contracting State in the other Contracting State or of movable property belonging to a fixed base held by a resident of one Contracting State in the other Contracting State may be taxed in that other Contracting State.

3. Assets consisting of ships or aircraft operated by an undertaking of a Contracting State in international traffic, as well as movable property connected with the operation of such vessels and aircraft, may be taxed only in the Contracting State of which the enterprise is resident.

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 either in accordance with the provisions imposed by the domestic law of the Contracting States or in accordance with the following provisions:

(a) Where a resident of a Contracting State obtains income or possesses assets which, under the provisions of this Convention may be subject to taxation in the other Contracting State, the Contracting State referred to above shall, within the limitations imposed by its domestic law:

(i) the deduction from the income tax of that resident equal to the income tax paid in the other Contracting State;

(ii) the deduction of the property tax of that resident in an amount equal to the tax paid in the other Contracting State on those assets;

(iii) the deduction of corporation tax actually paid by the company which distributes the dividends corresponding to the profits from which the dividends are paid, in accordance with its domestic law.

However, such deduction may not exceed the part of income tax or property tax, calculated before deduction, corresponding to the income or assets that may be taxed in the other Contracting State.

(b) Where under any provision of this Convention the income obtained by a resident of a Contracting State or the property held by him is tax-exempt in that Contracting State, he 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.

1. Nationals of one Contracting State shall not be subject in the other Contracting State to any taxes or obligations relating thereto which are not or are more burdensome than those to which 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 undertaking 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. Similarly, the debts of an undertaking of a Contracting State contracted with a resident of the other Contracting State shall be deductible for the determination of the assets subject to taxation of that undertaking under the same conditions as if they had been contracted with a resident of the State referred to in the first instance.

4. Undertakings of a Contracting State whose capital is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State shall not be subject in the 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 which 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 24(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 considers the complaint well founded and if it is not in itself able to reach a satisfactory solution, make every effort to resolve the matter by means of an amicable agreement with the competent authority of the other Contracting State, in order to avoid an imposition which does not comply 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. The competent authorities of the Contracting States may communicate directly with each other in order to reach agreement within the meaning of the preceding paragraphs. Where it is considered that this agreement may be facilitated by an oral exchange of views, it may be carried out through a committee composed of representatives of the competent authorities of the Contracting States.

1. The competent authorities of the Contracting States shall exchange the information necessary to implement the provisions of this Convention or of the 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 Articles 1 and 2. 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 be communicated only to persons or authorities (including administrative courts and bodies) responsible for the management or collection of taxes covered by the Convention, declaratory or executive procedures relating to such taxes, or for 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 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 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 take effect in respect of income or property taxes due from 1 January of the calendar year following the entry into force of the Convention.

The Convention shall remain in force until it is denounced by one of the Contracting States. Any Contracting State may denounce the Convention by diplomatic means, within five years of its entry into force, by 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 with respect to income and property taxes due from 1 January of the calendar year following the year in which the denunciation is communicated.

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

Done in duplicate in Madrid on 4 March 2004, in the Spanish language.

At the time of signing the Convention between the Kingdom of Spain and the Republic of Costa Rica to Prevent Double Taxation and Tax Evasion in Tax on Income and on Heritage, the signatories have agreed on the following provisions which form an integral part of the Convention:

I. Without prejudice to the content of this Protocol, the provisions of this Convention shall be interpreted in accordance with the commentaries to the 2003 OECD Model Convention.

The provisions of this Convention shall not preclude the application by Contracting States of clauses designed to prevent abuse of the application of the Convention provided for in their respective domestic laws.

II. As long as one Contracting State maintains a territoriality criterion in its tax system, where by application of the provisions of articles 6 to 21 of this Convention, that State has the exclusive power of taxation and under that territoriality criterion an income is not considered to be derived from that State, that income may be taxed in the other State, as if the Convention had not entered into force.

III. Ad Article 2.3.

In relation to Article 2.3(a)(v) local income and property taxes in Spain include the Real Estate Tax and the Economic Activities Tax.

With regard to article 2.3 (b) (i) of the Income Tax in Costa Rica, in particular, the taxes regulated by the Income Tax Act, Act No. 7092 of 21 April 1988 and its reforms and the Securities Market Regulatory Act, Act No. 7732 of 27 January 1997.

With regard to article 2.3 (b) (ii), property taxes in Costa Rica include, in particular, taxes on the ownership of motor vehicles, ships and aircraft and taxes on real property.

IV. Ad Article 11(3)(b).

For Costa Rica, the amounts paid for the leasing of capital goods and interest on loans are included in this section, provided that they are used in industrial or agricultural activities by companies domiciled in the country, paid to foreign institutions recognized by the Central Bank of Costa Rica as institutions of the first order, dedicated to this type of operation.

V. Ad Article 11(3)(c).

For Costa Rica, this item includes interest, commissions and other financial expenses paid by companies domiciled in the country to banks abroad, or to their financial institutions, recognized by the Central Bank of Costa Rica as institutions that are normally engaged in international transactions, including payments made by them to suppliers from abroad for the import of goods.

VI. Ad Article 12.3.

Financial or administrative technical advice means the result of a contract in which one of the parties is obliged to communicate its particular knowledge and experience of a technical financial or administrative nature to the other party who may use them on its own account and without the assignor intervening in the assignee's use of the transferred knowledge or experience and without ensuring the result. Financial or administrative technical advice does not include contracts for the provision of services where one of the parties is obliged, supported by the usual knowledge of his profession, to do a work for the other party itself.

VII. Ad Article 13.

For Costa Rica, income from the disposal of tangible property subject to depreciation referred to in article 8 (f) of Act No. 7092 as well as the usual capital gains referred to in article 6 (d) of the same Act shall be deemed to be governed by the provisions of article 7 of the Convention, while that article remains in force.

VIII. Ad Article 16.

For Costa Rica, it is understood within this article that remuneration, salaries, commissions, fees, daily allowances, bonuses paid or credited by companies or entities domiciled in the country to members of boards, councils or other governing bodies operating abroad.

IX. Ad Article 17.3.

It is understood that the visit of artists and sportsmen is 'substantially' financed by public funds when 75 per cent or more of the total costs of transportation, accommodation and daily subsistence allowance are financed by such funds.

X. Ad Article 21.

The scope of this Agreement does not include acquisitions by natural persons of property and inheritance rights or any other inheritance title, as well as by donation or any other legal business free of charge in the meantime.

XI. Ad Article 23.

As long as Costa Rica maintains a territoriality criterion in its tax system (by which the income obtained in Spain by a resident of Costa Rica or his or her estate located in Spain will not be subject to taxation in Costa Rica), Costa Rica may not apply the provisions of this article to its residents, in which case the provisions of its domestic legislation to that effect will apply.

XII. Ad article 24.

In relation to Article 24, the provisions of the Convention shall be understood as not impeding the application by a Contracting State of its domestic rules on undercapitalisation or excessive indebtedness.

XIII. Ad Article 26.

The authorities of the Contracting States undertake to ensure the exchange of information, including bank information, exercising the same powers as the Constitution and domestic laws grant to those authorities with respect to their residents for the purpose of investigation or tax information. These powers shall be exercised, where appropriate, by judicial intervention.

For Costa Rica, the stock exchange, the posts, the agents, the stock exchanges and those who work for them will be able to provide information on the negotiations entrusted to them, by written authorization of the client, court order, request of the Superintendencia General de Valores or of a stock exchange, to meet the information requirements of the Spanish tax authorities.

The competent authorities of the Contracting States undertake to comply with the information requirements of the other Contracting State within six months of receipt of the request.

XIV. Ad Articles 10, 11, 12 and 14.

In the event that Costa Rica, after signing this Convention, agrees with a third State:

(a) an exemption from dividends, interest, royalties or independent professional services from Costa Rica not covered by this Agreement; or

(b) a tax rate on dividends, royalty interest or independent professional services less than that laid down in Articles 10, 11, 12, and 14 of this Convention, or a percentage of holding of capital less than that laid down in Article 10(2); or

(c) a duration longer than that laid down in Article 5(3);

then such exemption, tax rate or period of duration shall automatically apply to this Convention as if expressly stated therein and shall take effect from the date on which the provisions of the Convention signed with that third State take effect.

For the exclusive purposes of the application of this clause XIV of the Protocol, the income referred to in Article 10(6) of this Convention is also treated as dividends.

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

Done in duplicate in Madrid on 4 March 2004, in the Spanish language.

This Convention entered into force on 15 December 2010, the date of receipt of the last notification of compliance with domestic legal procedures, as set out in its Article 28.2.

What is made public for general knowledge.

Madrid, December 23, 2010.–The Technical General Secretary of the Ministry of Foreign Affairs and Cooperation, Rosa Antonia Martínez Frutos.