Uruguay

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:

(b) In Uruguay:

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 notify each other of any significant changes 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 Kingdom of Spain and, used geographically, means the territory of the Kingdom of Spain, including airspace, its internal waters, its territorial sea and areas outside its territorial sea in which, under international law and under its domestic law, the Kingdom of Spain exercises or may exercise in future jurisdiction or rights of sovereignty over the seabed, its subsoil and superjacent waters, and its natural resources;

(b) the term ‘Uruguay’ means the Eastern Republic of Uruguay, used in a geographical sense, means the territory in which tax laws are applied, including airspace, maritime areas, under Uruguayan jurisdiction or in which sovereignty rights are exercised or may be exercised in the future, in accordance with international law and national law;

(c) the words ‘one Contracting State’ and ‘the other Contracting State’ mean Spain or Uruguay, 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 term ‘enterprise’ applies to the pursuit of any economic activity;

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

(h) 'international traffic' means any transport carried out by a ship or aircraft operated by an undertaking whose effective head office is situated in a Contracting State, except where the ship or aircraft is operated only between points situated in the other Contracting State;

(i) the expression ‘competent authority’ means:

(i) in Spain: the Minister of Economy and Finance or his authorised representative;

(ii) in Uruguay, the Ministry of Economy and Finance, its representatives or the authority to which it has delegated its powers.

(j) the term 'national' means:

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

(ii) a legal person, a personalist company or an association incorporated in accordance with the law in force in a Contracting State.

(k) the term ‘economic activity’ includes the provision of professional services as well as any other activity of an independent nature.

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 only 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 only 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 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 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 or she shall be considered a resident only of the State in which his or her place of effective management is located.

1. For the purposes of this Agreement, the term ‘permanent establishment’ means a fixed place of business through which an 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 of 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 engages in economic activities in that other State (whether by permanent establishment or otherwise), does not in itself make any of these companies permanent establishment of the other State.

1. Income from immovable property (including income from agricultural or forestry holdings) 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. Where ownership of shares or other rights directly or indirectly confers on the owner of such shares or rights the right to the enjoyment of immovable property, 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.

5. The provisions of paragraphs 1, 3 and 4 also apply to income derived from the immovable property of an undertaking.

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 operation of ships or aircraft in international traffic may be taxed only in the Contracting State in which the effective head office of the undertaking is situated.

2. For the purposes of this Article, the term ‘benefits arising from the operation of ships or aircraft in international traffic’ also includes benefits arising occasionally from:

(a) the leasing of empty ships or aircraft; and

(b) the use or lease of containers (including trailers and related equipment for the transport of containers),

if such activities are part of the operation of ships or aircraft in international traffic.

3. If the place of effective management of a shipping undertaking is on board a ship or vessel, it shall be deemed to be situated in the Contracting State where the base port of the ship or vessel is located, or if there is no such base port, in the Contracting State of which the person operating the ship is resident.

4. 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 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 5 per 100 of the gross amount of the dividends.

By way of derogation from the preceding paragraph, the Contracting State in which the company paying the dividends is resident shall treat as exempt dividends paid by that company to a company whose capital is wholly or partly divided into shares or shares and which is resident of the other Contracting State, provided that it holds directly at least 75 per cent of the capital of the company paying the dividends.

The latter two paragraphs do not affect the company's taxation in respect of 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 allowing participation in profits other than credit, as well as income subject to the same tax regime as income from shares or 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, an economic activity through a permanent establishment located there, and the share of the dividends is effectively linked to that permanent establishment. 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 located in that other State, or subject the undistributed profits of the company to a tax on them, even if dividends paid or profits not distributed consist, in whole or in part, of profits or income from that other State.

6. Notwithstanding the other provisions of this Convention, where a company resident of a Contracting State has a permanent establishment in the other Contracting State, that other Contracting State may impose remittances of profits, or what is considered as such, transferred by the permanent establishment to the resident company of the Contracting State mentioned first, but the tax thus required may not exceed 0 per cent of the gross amount.

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

2. However, these interests may also be subject to taxation in the Contracting State from which they come, in accordance with the law of that State; but if the beneficial owner of the interest is resident in the other Contracting State, the tax may not exceed 10 per cent of the gross amount of interest.

3. By way of derogation from paragraph 2, interest from one Contracting State and paid to a resident of the other Contracting State may be subject to taxation in that other State only if the recipient agrees with the beneficial owner of the interest and:

(a) is the State itself or the Central Bank, one of its political subdivisions, or local entities;

(b) The payer of interest is the State from which they come, or one of its political subdivisions and local entities;

(c) interest is paid on the basis of a loan or credit due, granted, granted, guaranteed or insured by that State, or a political subdivision, local entity or export credit agency;

(d) is a financial institution for a loan of three years or more to finance investment projects;

(e) interest is paid on account of a debt arising as a result of the sale on credit of any equipment, goods or service;

(f) is a pension fund approved for tax purposes by that State and the income of that fund is generally exempt from taxation in that 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. The term ‘interest’ does not include income considered dividends in accordance with Article 10.

5. The provisions of paragraphs 1 to 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 derives, an economic activity through a permanent establishment located in that other State, and the credit generated by the interest is effectively linked to that permanent establishment. In such a case, the provisions of Article 7 shall apply.

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 resident or not of a Contracting State, has in a Contracting State a permanent establishment in respect of which the debt giving rise to the interest has been incurred and such establishment supports payment of the interest, the interest shall be deemed to have come from the Contracting State where the permanent establishment is located.

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. Royalties or royalties from one Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.

2. However, these royalties may also be taxed in the Contracting State from which they come, in accordance with the law of that State; but if the beneficial owner of the royalties is resident in the other Contracting State, the tax may not exceed:

(a) 5 per cent of the gross amount of royalties or royalties in the case of copyrights in literary, artistic or scientific works;

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

3. The term ‘royalties or royalties’ within the meaning of this Article means the amounts of any kind paid for the use, or the granting of use, of copyright, including cinematographic films or films, tapes and other means of reproduction of the image and sound, patents, trademarks, designs, plans, formulas or secret procedures, or for the use, or the 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 or royalties, resident of one Contracting State, carries out in the other Contracting State, from which the royalties or royalties come, an economic activity through a permanent establishment located in that other State, and the right or for which the royalties or royalties are paid is effectively linked to that permanent establishment. In such cases the provisions of Article 7 shall apply.

5. For the purposes of this Article, royalties or royalties shall be deemed to come from a Contracting State when the debtor is a resident of that State. However, where the debtor of the royalties or royalties, whether or not resident in one of the Contracting States, has in a Contracting State a permanent establishment in respect of which the obligation to pay the royalties or royalties arises and which are borne by that permanent establishment, the royalties or royalties shall be deemed to come from the State in which the permanent establishment is located.

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 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, including gains from the disposal of that permanent establishment (either with the enterprise as a whole 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 in international traffic or from movable property affected by the operation of such vessels or aircraft may be taxed only in the Contracting State in which the effective head office of the undertaking is situated.

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

5. Gains arising from the disposal of shares or other rights which, directly or indirectly, grant the owner of such shares or rights the right to the enjoyment of immovable property situated in a Contracting State, may be subject to taxation in that State.

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

1. Without prejudice to articles 15, 17 and 18, salaries, wages 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 account 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 held by the employer 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 may be taxed in the Contracting State in which the effective head office of the undertaking is situated.

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 7 and 14, any 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, 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 and 14, where the income derived from the personal activities of the performing artists or sportsmen, in that capacity, is attributed not to the performer himself or to another person, such income may be subject to taxation in the Contracting State where the activities of the performing artist or sportsman are carried out.

3. Notwithstanding the provisions of paragraphs 1 and 2 of this Article, income obtained by an artist or sportsman shall be exempt from taxation in the Contracting State in which such activities are carried out where they are financed by at least 50 per cent from public funds of one or both States and are carried out under a cultural partnership agreement between the Contracting States.

Without prejudice to Article 18(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) Wages, salaries and other similar remuneration 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.

2.

(a) By way of derogation from paragraph 1, pensions and other similar remuneration paid by a Contracting State or one of its political subdivisions or local entities, either directly or from funds constituted, to a natural person on the basis of services provided to that State or to that subdivision or entity, may be subject to taxation only in that State.

(b) Such pensions and similar remuneration 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. The provisions of Articles 14, 15, 16 and 17 apply to salaries, salaries, pensions and other similar remuneration paid for services rendered in the context of an economic 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 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.

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 an economic activity in the other Contracting State through a permanent establishment situated in that other State, and the right or for which the income is paid is effectively linked to that permanent establishment. In such a case, the provisions of Article 7 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 may be taxed in that other Contracting State.

3. Assets made up of ships or aircraft operated in international traffic, as well as movable property affected by the operation of such vessels and aircraft, may be taxed only in the Contracting State in which the place of effective management of the undertaking is situated.

4. Property constituted by shares or other rights in a corporation or any other type of legal person, the value of which derives by more than 50 per cent, directly or indirectly, from immovable property located in a Contracting State or by shares or other rights which grant the owner of such property the right to the enjoyment of immovable property located in a Contracting State, may be taxed in the Contracting State in which the immovable property is located.

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

1. In Spain, double taxation shall be avoided either in accordance with the provisions of its domestic law or in accordance with the following provisions, subject to Spanish domestic law:

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

(i) the deduction from that resident's income tax of an amount equal to the income tax paid in Uruguay;

(ii) the deduction of the property tax of that resident in an amount equal to the tax paid in Uruguay 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 Uruguay.

(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 Uruguay, double taxation shall be avoided in accordance with the provisions of its domestic legislation or in accordance with the following provisions:

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

(i) The determination of the corresponding tax by deducting from income tax, to be paid in Uruguay on income from Spain, in accordance with Uruguayan laws, the tax paid to the Spanish tax under Spanish laws;

(ii) The deduction of the tax on the assets of that resident in the amount equal to the tax paid in Spain on those assets;

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

The amount of the deduction may not, however, exceed the portion of the Uruguayan tax corresponding to such income or property before the deduction is made.

(b) Where under any provision of this Convention the income obtained by a resident of Uruguay or the property he holds is tax-exempt in Uruguay, Uruguay 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 or 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 23(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 information likely to be relevant to the application of this Convention, or to the administration or application of national law relating to taxes of any kind or designations required by the Contracting States, their political subdivisions or local authorities, to the extent that such taxation is not contrary to the Convention. The exchange of information is not limited by Articles 1 and 2.

2. Information received by a Contracting State pursuant to paragraph 1 shall be kept secret in the same manner as information obtained under the domestic law of that State and shall only be communicated to the persons or authorities (including courts and administrative bodies) responsible for the management or collection of taxes referred to in paragraph 1 of the declaratory or executive procedures relating to such taxes or for the resolution of appeals relating thereto. These persons or authorities shall use this information only for these purposes. They may disclose the information at public court hearings or in court judgements.

Notwithstanding the above, information received by a Contracting State may be used for other purposes, where such use is permitted by the laws of the State providing the information.

3. Under no circumstances may the provisions of paragraphs 1 and 2 be interpreted as obliging a Contracting State to:

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

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

(c) provide information revealing business, industrial, commercial or professional secrecy or an industrial process, or information the communication of which is contrary to public policy (ordre public).

4. If a Contracting State requests information pursuant to this Article, the other Contracting State shall use the measures to collect information available to it in order to obtain the information requested, even if that other State may not need such information for its own tax purposes. The above obligation is limited by paragraph 3 except where such limitations prevent a Contracting State from providing information solely because of the absence of national interest in it.

5. In no case shall the provisions of paragraph 3 be interpreted as allowing a Contracting State to refuse to provide information solely because it is held by banks, other financial institutions, or by any person acting in a representative or fiduciary capacity or because it relates to property rights in a person.

1. Contracting States shall assist each other in the collection of their tax claims. This assistance is not limited by Articles 1 and 2. The competent authorities of the Contracting States may, by mutual agreement, determine how this Article is to be applied.

2. The term ‘tax credit’ within the meaning of this Article means any amount due in respect of taxes of any kind or designation required by the Contracting States, their political subdivisions or their local authorities, to the extent that such taxation is not contrary to this Convention or to any other instrument to which the Contracting States are a party; the term also includes interests, administrative penalties and costs of collection or establishment of precautionary measures relating to that amount.

3. Where a tax claim of a Contracting State is enforceable under the law of that State and the debtor is a person who under the law of that State cannot at that time prevent the recovery, at the request of the competent authorities of that State, the competent authorities of the other Contracting State shall accept such tax claim for the purposes of its recovery. That other State shall collect the tax claim in accordance with its legislation relating to the application and collection of its own taxes as if it were its own tax claim.

4. Where a tax claim of one Contracting State is of a nature such that that State may, under its domestic law, take interim measures to ensure its recovery, the competent authorities of the other Contracting State shall, at the request of the competent authorities of the first Contracting State, accept such tax claim for the purpose of adopting such interim measures. That other State shall take interim measures in accordance with the provisions of its law as if it were a tax claim of its own, even if at the time of application of such measures the tax claim was not enforceable in the State referred to first or its debtor was a person entitled to prevent its collection.

5. By way of derogation from paragraphs 3 and 4, a tax claim accepted by a Contracting State for the purposes of those paragraphs shall not be subject in that State to the requirement or priority applicable to tax claims under its domestic law on account of their nature. Similarly, a tax claim accepted by a Contracting State for the purposes of paragraphs 3 or 4 shall not enjoy in that State the prelations applicable to tax claims under the law of the other Contracting State.

6. Proceedings concerning the existence, validity or amount of the tax claim of one Contracting State may not be initiated before the courts or administrative bodies of the other Contracting State.

7. Where at a time after the request for recovery made by a Contracting State pursuant to paragraphs 3 or 4, and prior to its recovery and referral by the other Contracting State, the tax claim ceases to be

(a) in the case of an application under paragraph 3, a claim enforceable under the national law of the State referred to first and the debtor of which was a person who at that time and under the law of that State could not prevent its recovery; or

(b) in the case of an application under paragraph 4, a claim in respect of which, in accordance with the national law of the State referred to first, interim measures may be taken to ensure its recovery

the competent authorities of the State referred to first shall promptly notify the competent authorities of the other State of that fact and, as decided by that other State, the State referred to first shall suspend or withdraw its request.

8. In no case shall the provisions of this Article be construed 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) Take measures contrary to public order (ordre public);

(c) to provide assistance where the other Contracting State has not applied all the precautionary measures or recovery measures, as the case may be, available to it under its legislation or administrative practice;

(d) provide assistance in cases where the administrative burden on that State is clearly disproportionate to the benefit to be obtained by the other Contracting State.

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 rules of international law or under the provisions of special agreements.

1. Each Government of the Contracting States shall notify the other, through diplomatic channels, that the internal procedures required in each Contracting State for the entry into force of this Convention have been complied with.

2. The Convention shall enter into force within three months of the date of receipt of the last notification referred to in paragraph 1 and its provisions shall take effect:

(a) in respect of taxes levied by the withholding tax system at the source on amounts paid from 1 January inclusive of the calendar year immediately after the date of entry into force of this Convention.

(b) in respect of property tax, from 1 January of the calendar year immediately after the date of entry into force of this Convention.

(c) in respect of other taxes, for tax periods beginning on or after 1 January of the calendar year immediately after the date of entry into force of this Agreement.

(d) in the remaining cases, on the date on which the Convention enters into force.

This Convention shall remain in force until its denunciation by one of the Contracting States. Any Contracting State may notify in writing the denunciation of the Convention to the other Contracting State, through diplomatic channels, at least six months before the end of any calendar year commencing after a period of five years from the date on which the Convention enters into force. In such a case, the Convention shall cease to have effect:

(a) in respect of taxes levied by the source restraint system on amounts paid from 1 January inclusive of the calendar year immediately following the notification of the complaint;

(b) in the remaining cases, on the first day of January of the calendar year following that in which the complaint is notified.

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

Done at Madrid, on 9 October 2009, in two originals of the same language, both texts being equally authentic.

For the Kingdom of Spain, Carlos Ocaña Pérez de Tudela, Secretary of State for Finance and Budgets.–For the Eastern Republic of Uruguay, Álvaro García, Minister of Economy and Finance.

Protocol on the Convention between the Kingdom of Spain and the Eastern Republic of Uruguay on the avoidance of double taxation and the prevention of tax evasion in the field of income and property taxes:

In order to supplement the Convention on the Prevention of Double Taxation and the Prevention of Tax Evasion in the Field of Income and Property Taxes, the Kingdom of Spain and the Eastern Republic of Uruguay have agreed on the following provisions, which form part of that Convention:

I. Ad Article 7:

(a) If an undertaking of a Contracting State sells goods or goods through a permanent establishment in the other Contracting State or engages in a commercial or industrial activity there, the profits of that permanent establishment shall not be determined on the basis of the total amount obtained by the undertaking but solely on the basis of the sum attributable to actual sales or to the actual commercial or industrial activity of the permanent establishment concerned;

(b) if an enterprise has a permanent establishment in the other Contracting State, the profits obtained by such a permanent establishment through the procurement, in particular of projects, supplies or construction of industrial, commercial or scientific equipment or facilities, or of public contracts shall not be determined on the basis of the total contract price concerned but only on the basis of the part of the contract actually performed by the permanent establishment in the Contracting State in which it is located. Profits derived from the supply of goods to the permanent establishment and profits derived from the part of the contract to be executed in the Contracting State` in which the headquarters of the parent company is located may be taxed only in that State;

(c) remuneration for technical services, including scientific, geological or technical studies or projects, or for construction contracts, including corresponding plans, or for advisory or supervisory activities, shall be considered remuneration for the purposes of the implementation of Article 7 of the Convention.

II. Ad to Article 12(3).

The amounts paid for the use or grant of the use of comparable names, images and other personal rights are understood to be included in the definition of this Article 12.

III. Ad. to article 25.

Desiring to facilitate the exchange of information in furtherance of Article 25 of the Convention, Article 25 shall be understood to apply in accordance with the following guidelines:

A. Definitions:

For the purposes of this Protocol:

(a) the expression ‘measures to gather information’ means any provision of law and administrative or judicial procedure which allows a Contracting State to obtain and provide the requested information;

(b) the term ‘information’ includes any data, statement or document irrespective of its nature;

(c) the term ‘collective investment institution’ means any vehicle for collective investment, irrespective of its legal form;

(d) the term 'notification' means the delivery of documents to residents of any of the Contracting States in accordance with the rules on notifications in force in that State.

B. Exchange of information upon request:

1. The competent authority of a Contracting State shall, upon request, provide information for the purposes provided for in Article 25. Such information shall be exchanged irrespective of whether the conduct under investigation could constitute a criminal offence under the laws of that Contracting State if such conduct had occurred in that State.

2. If the information in the possession of the competent authority of a Contracting State is not sufficient to enable it to comply with a request for information, that Contracting State shall use all appropriate measures to collect information in order to provide the other Contracting State with the information requested, irrespective of whether the Contracting State referred to in the first instance may not need such information for its own tax purposes.

3. If expressly requested by the competent authority of a Contracting State, the competent authority of the other Contracting State shall provide information pursuant to Article 25, to the extent permitted by its domestic law, in the form of witness statements and authenticated copies of original documents.

4. Each Contracting State shall ensure that, for the purposes of Article 25, its competent authorities are empowered to obtain and provide, upon request, information held by banks, other financial institutions and any person acting in a representative or fiduciary capacity, including designated and fiduciary agents.

5. Each Contracting State shall use all appropriate measures to obtain and provide, for the purposes of Article 25, upon request:

(a) information relating to the legal and effective ownership of capital companies, companies of persons, trusts, foundations and other persons, including, subject to the limitations laid down in Article 1 of the Convention, information on ownership in respect of all persons forming a chain of ownership, including, in the case of collective investment institutions, information on shares, shares and other units;

(b) in the case of trusts, information on trustees, trustees and beneficiaries;

(c) and in the case of foundations, information on the founders, members of the board of the foundation and beneficiaries.

6. The competent authority of one Contracting State shall send the requested information as soon as possible to the other Contracting State. In order to ensure a prompt response, the competent authority of the Contracting State referred to first:

(a) acknowledge receipt of the written request to the competent authority of the other Contracting State not later than 15 calendar days from its receipt.

(b) Notify the competent authority of the other Contracting State of any defects in the request within 60 days of acknowledgement of receipt.

(c) If the competent authority of the Contracting State mentioned above has not been able to obtain and provide the information within 90 days of the acknowledgement of receipt, it shall immediately inform the other Contracting State, explaining the reasons for that impossibility, the nature of the obstacles or the reasons for their refusal. The other Contracting State shall then decide whether or not to annul its request. If it decides not to annul it, the Contracting States shall, informally and directly, by means of an amicable agreement or otherwise, analyse the possibilities of achieving the object of the request and shall consult each other on how to achieve that objective.

(d) Provide the information no later than six months from the acknowledgement of receipt. In certain cases of particular complexity, the competent authorities may agree on longer deadlines.

The temporary restrictions referred to in this Article in no way affect the validity and legality of the information exchanged under this Convention.

7. The competent authorities of the Contracting States shall, by mutual agreement, determine the mode of transmission of information requirements to the requested State and, in the event of delegation, shall inform the body responsible for the exchange of information.

C. Possibility of refusing a request:

1. The provisions of this Convention shall not impose on a Contracting State an obligation to obtain or provide information that may reveal confidential communications between a client and a lawyer or other recognized legal representative, where such communications:

(a) occur for the purpose of seeking or providing legal advice; or

(b) occur for use in an ongoing or planned legal procedure.

2. A Contracting State may refuse a request for information if the other Contracting State requests it to administer or enforce a provision of its tax law, or any related requirement, which is discriminatory against a national of the Contracting State mentioned first in comparison with a national of the other Contracting State in the same circumstances.

D. Notification requirements.

Cooperation between the two Contracting States shall be understood to include assistance in the notification under the following provisions:

1. The authorities of one Contracting State shall, at the request of the competent authorities of the other Contracting State, and in accordance with the laws governing the notification of such instruments in the Contracting State referred to first, notify, where possible, the decisions and any other instrument issued by the administrative authorities of the other Contracting State which relate to the application of taxes of any kind and designations required by the Contracting States.

2. The competent authorities of one Contracting State shall inform the competent authorities of the other Contracting State of the name, place of domicile and any other relevant information of the consignee by issuing the notification request and if they have such information.

3. The competent authorities of a Contracting State shall acknowledge receipt of the written request to the competent authorities of the other Contracting State and shall notify them of any defect in the request.

4. The competent authorities of the Contracting States may, by mutual agreement, establish the channel for the transmission of notification requirements.

E. Language.

The requirements and the answers thereto shall be drawn up in the Spanish language.

IV. Limitation of benefits.

1. The agreement shall not apply to companies or entities hosting one of the following schemes:

(a) Anonymous Financial Investment Companies (SAFI), when they continue to benefit from the tax regime provided for in Act No. 11,073 of 24 June 1948, or its subsequent amendments;

(b) External Financial Institutions (IFE), when they continue to benefit from the tax regime provided for in the Decree of 17 August 1989 or its subsequent amendments;

(c) Free zones provided for in Act No. 15,921 or its subsequent amendments with regard to the provision of financial services.

Subparagraphs (a) and (b) shall not apply when Uruguay is in a position to exchange information with respect to such entities as provided for in this Convention.

2.

(a) This Convention shall be interpreted in such a way as not to prevent a Contracting State from applying its domestic rules in order to prevent tax evasion and fraud.

(b) Contracting States declare that their domestic rules and procedures with respect to abuses of the rule (including tax treaties) are applicable to combat such abuses.

(c) This Convention shall not prevent Contracting States from applying their domestic rules relating to international tax transparency.

(d) The provisions of articles 10, 11 and 12 do not apply where the primary purpose or primary purpose of any person related to the creation or assignment of the shares or other rights generated by the dividends, the creation or assignment of the receivable generated by the interest, the creation or assignment of the right generated by the royalties or royalties, is to obtain the benefit of those articles through such creation or assignment.

V. With regard to the correct application of the Convention.

(a) In order to be able to apply this Convention, Contracting States shall issue certificates of residence ‘for the purpose of applying’ this Convention to their residents. These certificates shall show that the person is subject to the taxes established in the internal rule of that State. The authorities empowered to issue residence certificates shall be:

In the case of Spain: the State Tax Administration Agency.

In the case of Uruguay: the Ministry of Economy and Finance or the body to which the function is delegated.

Where the procedures or authority issuing these residence certificates are modified in one Contracting State, that State shall notify the other Contracting State in accordance with Article 24(3) of this Convention.

(b) In the case of Uruguay, in relation to payments made to residents of Spain, at the time of the deductibility of the expenditure in Uruguay, the payment of taxes in Spain shall be deemed to have been established by the presentation of the certificate of residence referred to in the preceding paragraph.

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

Done at Madrid, on 9 October 2009, in two originals of the same language, both texts being equally authentic.

For the Kingdom of Spain, Carlos Ocaña Pérez de Tudela, Secretary of State for Finance and Budgets.–For the Eastern Republic of Uruguay, Álvaro García, Minister of Economy and Finance.

This Convention enters into force on 24 April 2011, after a period of three months from the date of receipt of the last notification referred to in paragraph 1, as set out in Article 28 thereof.

What is made public for general knowledge.

Madrid, March 30, 2011.–The Technical General Secretary of the Ministry of Foreign Affairs and Cooperation, Rosa Antonia Martínez Frutos.