Mexico

The Preamble to the Convention is deleted and replaced by the following:

‘The Kingdom of Spain and the United Mexican States;

Desiring to promote the development of their economic relations and to enhance cooperation in tax matters;

With the intention of concluding a convention to avoid double taxation in respect of income and property taxes, without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance (including agreements for the abuse of conventions aimed at allowing residents of third States to take indirect advantage of the benefits provided for in this Convention);

Have agreed as follows:’

Paragraph 3 of Article 2 of the Convention is deleted and replaced by the following:

‘3. The current taxes to which the Convention applies are, in particular:

(a) In Spain:

(i) Personal Income Tax;

(ii) corporation tax;

(iii) non-resident income tax; and

(iv) Property Tax.

(hereinafter referred to as “Spanish tax”)

(b) In Mexico, income tax.

(hereinafter referred to as “Mexican tax”).’

1. Paragraph 1 (i) of Article 3 of the Convention is deleted and replaced by the following:

“(i) The term “competent authority” means:

(a) in the case of Spain, the Minister of Finance and Public Administrations or his authorised representative; and

(b) in the case of Mexico, the Ministry of Finance and Public Credit.’

2. A new subparagraph is added to paragraph 1 of Article 3 of the Convention:

(j) The term “pension fund” means:

(a) in Spain, any plan, fund, mutual fund or other entity incorporated in Spain:

(i) the main purpose of which is to manage the right of persons whose favour is to receive income or capital from retirement, survival, widowhood, orphanhood or disability; and

(ii) whose contributions may be reduced from the personal tax base;

(b) in Mexico, any person, entity or trust, including the “Aphores and Sieferores” established in Mexico:

(i) administering pension schemes or providing retirement benefits; or

(ii) they receive income on behalf of one or more persons intended to administer pension schemes or provide benefits,

provided that they are regulated by one or more of the following authorities: the National Insurance and Bail Commission, the National Banking and Securities Commission or the Ministry of Finance and Public Credit.’

1. Paragraph 1 of Article 4 is deleted from the Convention and replaced by the following:

‘1. For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the law of that Contracting State, is subject to taxation in that Contracting State by reason of his or her domicile, residence, address or any other criterion of a similar nature, including also that Contracting State and its political subdivisions or local entities. This term does not, however, include persons who are subject to taxation in that Contracting State solely on the income they obtain from sources located in that Contracting State, or on the property situated therein.’

2. Paragraph 3 of Article 4 is deleted from the Convention and replaced by the following:

‘3. Where, under the provisions of paragraph 1, a non-natural person is resident of both Contracting States, he or she shall be deemed to be a resident exclusively of the Contracting State in which his or her place of effective management is located.

By way of derogation from the foregoing, where the situation of dual residence results from the fact that that person has an effective head office in each of the Contracting States, the competent authorities of the Contracting States shall endeavour to define, through an amicable agreement, the Contracting State of which that person is to be regarded as resident for the purposes of the Convention, taking into account from where the Managing Director and the senior executives usually perform their duties, from where the high day-to-day management is carried out, as well as any other equivalent factor.’

Article 9 is deleted from the Convention and replaced by the following:

‘Article 9. Partner companies.

1. When.

(a) an undertaking of a Contracting State participates directly or indirectly in the direction, control or capital of an undertaking of the other Contracting State; or

(b) the same persons participate directly or indirectly in the direction, control or capital of an undertaking of one Contracting State and of an undertaking of the other Contracting State,

and in both cases the two undertakings are, in their commercial or financial relations, bound by accepted or imposed conditions which differ from those to 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 realized because of them, may be included in the profits of that undertaking and, consequently, subject to taxation.

2. Where a Contracting State includes in the profits of an enterprise of that Contracting State - and consequently grave - those of an enterprise of the other Contracting State that have already been subject to taxation in that other Contracting State, and that Other State recognizes that the profits thus included are benefits that would have been realized by the undertaking of the Contracting State mentioned first if the terms agreed between the two companies had been those that would have been agreed upon by independent companies, that other Contracting State shall make such adjustment as may be appropriate to the amount of the tax that has taxed those profits. The other provisions of this Convention shall be taken into account in determining such an adjustment and the competent authorities of the Contracting States shall be consulted where necessary."

Paragraph 2 of Article 10 of the Convention is deleted and replaced by the following:

‘2. However, such dividends may also be subject to taxation in the Contracting State in which the corporation paying the dividends resides and under the law of that Contracting State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax thus required may not exceed 10 per cent of the gross amount of the dividends.

Notwithstanding the provisions of the preceding paragraph, the Contracting State in which the company paying the dividends resides shall exempt dividends paid if the beneficial owner of the dividends is:

(a) a company whose capital is wholly or partly divided into shares or shares and which is resident in the other Contracting State, provided that the latter holds directly at least 10 per cent of the capital of the company paying the dividends; or

(b) a pension fund resident of the other Contracting State.’

1. Paragraph 2 of Article 11 is deleted from the Convention and replaced by the following:

‘2. However, such interests may also be subject to taxation in the Contracting State from which they come and in accordance with the law of that Contracting 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) 4.9 per cent of the gross amount of interest in the case of interest paid on a loan of any kind, granted by a bank or any other financial institution, including investment banks and savings banks, and insurance companies, as well as interest paid on bonds and other credit securities that are traded regularly and substantially on a recognized securities market;

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

2. Paragraph 3 of Article 11 is deleted from the Convention.

3. Paragraph 4 of Article 11 is deleted from the Convention and replaced by the following:

‘3. Notwithstanding the provisions of paragraph 2, the interest referred to in paragraph 1 may be taxed in the Contracting State of which the beneficial owner of the interest is resident only if it satisfies any of the following requirements:

(a) the beneficiary is one of the Contracting States, one of its political subdivisions or one of its local entities, or the Central Bank of one of the Contracting States;

(b) the interest is paid by any of the entities referred to in subparagraph (a) above;

(c) the interest is paid for loans of three (3) years or more, granted or guaranteed by public financing or guarantee entities of that Contracting State, the purpose of which is to promote export by granting credits or guarantees on preferential terms; or

(d) the beneficiary is a pension fund.’

4. Paragraph 5 of Article 11 of the Convention is renumbered as paragraph 4.

5. Paragraph 6 of Article 11 of the Convention is deleted and replaced by the following:

‘5. The provisions of paragraphs 1, 2 and 3 do not apply if the beneficial owner of the interest, resident of one Contracting State, exercises or has exercised in the other Contracting State from which the interest originates, an industrial or commercial activity through a permanent establishment located in that other Contracting State, or provides or has provided professional services through a fixed base situated therein, with which the credit generated by the interest is effectively linked. In such cases the provisions of Article 7 or Article 14 apply, as appropriate.’

6. Paragraphs 7 and 8 of Article 11 of the Convention should be renumbered to paragraphs 6 and 7.

7. Paragraph 9 of Article 11 is deleted from the Convention.

Paragraph 8 of Article 12 is deleted from the Convention.

1. Paragraph 2 of Article 13 of the Convention is deleted and replaced by the following:

‘2. Gains by a resident of a Contracting State from the disposal of shares or shares, or similar rights, the value of which derives by more than 50 per cent, directly or indirectly, from immovable property located in the other Contracting State, may be subject to taxation in that other Contracting State. For this purpose, no account shall be taken of immovable property which that company, or a moral or legal person, affects its industrial, commercial or agricultural activity or the provision of professional services.’

2. Paragraph 3 of Article 13 of the Convention is deleted and replaced by the following:

‘3. Profits arising from the disposal of shares of a company resident in one of the Contracting States may be taxed in that Contracting State. However, the tax thus required may not exceed 10 per cent of the taxable profit.’

3. A new paragraph 4 is inserted in Article 13 of the Convention:

‘4. Notwithstanding the provisions of the preceding paragraphs, profits arising from the disposal of shares or units referred to in the preceding paragraphs may be taxed only in the Contracting State in which the alienator resides when the alien is:

(a) a financial institution;

(b) an insurance institution;

(c) a pension fund; or

(d) a resident who obtains the profit from the disposal of shares or shares that are regularly traded on a recognised securities market. The provisions of this subparagraph shall not apply where the profit results from the disposal of shares in a listed Investment Company in the Real Estate Market.’

4. Paragraphs 4, 5, 6 and 7 of Article 13 of the Convention should be renumbered to paragraphs 5, 6, 7 and 8.

5. A new paragraph is inserted in Article 13 of the Convention:

‘9. Where a natural person has been a resident of a Contracting State for five or more years and becomes a resident of the other Contracting State, the provisions of the preceding paragraphs shall not prevent the said Contracting State from imposing, under its domestic law, capital gains arising from shares or shares in a company corresponding to the period of residence of that natural person in the Contracting State referred to first.

In that case, capital gains taxed in the Contracting State referred to first shall not be included in the taxable amount corresponding to the calculation of capital gain by the other Contracting State.’

A new Article 22 is introduced into the Convention:

‘Article 22. Hydrocarbons.

1. The provisions of this Article shall apply notwithstanding any other provision of this Convention.

2. Where a person resident of a Contracting State carries out in the other Contracting State business activities consisting of exploration, production, refining, processing, transportation, distribution, storage or marketing of hydrocarbons and such activities are carried out for a period or periods that together exceed thirty (30) days in any period of twelve (12) months, such activities are considered to be carried out through a permanent establishment located in that other Contracting State.

3. For the purposes of calculating the period referred to in the preceding paragraph, the activities carried out by an undertaking associated with another undertaking shall be considered as carried out by the undertaking with which it is associated if the activities in question are identical or substantially similar to those carried out by the undertaking last mentioned or are part of the same project. For the purposes of this paragraph, the term associated enterprise shall have the meaning accorded to it by the law of the Contracting State where the activities are carried out.

4. Activities in the preceding paragraph shall not include:

(a) The towing or mooring activity carried out by vessels designed for that purpose, and any other activity carried out by such vessels.

(b) Transport of supplies or personnel by ships or aircraft in international traffic.

5. Salaries, wages and similar remunerations obtained by a resident of a Contracting State in respect of employment related to the activities covered by paragraph 2 may be subject to taxation in that other Contracting State.

However, such remuneration shall be subject to taxation only in the Contracting State mentioned above in the first instance if the employment is performed for an employer who is not resident in the other Contracting State and provided that the employment is carried out for a period or periods not to exceed thirty (30) days in any period or periods not to exceed twelve (12) months as a whole starting or ending in the respective fiscal year.’

Article 22 of the Convention is renumbered as article 23.

Article 23 is deleted from the Convention and replaced by the following, which is numbered as Article 24:

‘Article 24. Elimination of Double Taxation.

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

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

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

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

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

However, such deduction may not exceed the part of the Income Tax or Property Tax, calculated before the deduction, corresponding to the income or assets that may be taxed in Mexico.

2. In accordance with the provisions and without prejudice to the limitations established in Mexico's legislation, in accordance with the occasional amendments to this legislation that do not affect its general principles, Mexico will allow its residents to prove against the Mexican tax:

(a) the Spanish tax paid for revenue from Spain, in an amount not exceeding the tax payable in Mexico on such revenue; and

(b) in the case of a company which holds at least 10% of the capital of a company resident in Spain and from which the company mentioned first receives dividends, the Spanish tax paid by the company which distributes those dividends, in respect of the profits from which the dividends are paid.

3. Where, in accordance with any provision of the Convention, the income received by a resident of a Contracting State or the property he holds is exempt from tax in that Contracting State, the latter may, however, take into account the exempt income or wealth in order to calculate the amount of tax on the rest of the income or property of that resident.’

1. Articles 24 and 25 of the Convention should be renumbered to become articles 25 and 26 respectively.

2. Article 25, paragraph 3, renumbered is deleted and replaced by the following:

‘3. Unless the provisions of article 9, article 11, paragraph 7, or article 12, paragraph 7, apply, interest, royalties and other expenses paid by an enterprise of one Contracting State to a resident of the other Contracting State are deductible, in order to determine the profits subject to taxation of that enterprise, on the same terms as if they had been paid to a resident of the first Contracting State. Likewise, the debts of an undertaking of one Contracting State relating to a resident of the other Contracting State are deductible for the determination of the taxable assets of that undertaking under the same conditions as if they had been contracted with a resident of the first Contracting State.’

3. Article 26, paragraph 1, renumbered is deleted and replaced by the following:

‘1. Where a person considers that the measures taken by one or both Contracting States involve or may entail for him an imposition that is not in conformity with the provisions of this Convention, irrespective of the remedies provided for by the domestic law of the Contracting States, he may submit his case to the competent authority of the Contracting State of which he is resident or, if article 25, paragraph 1, to that of the Contracting State of which he is a national. The case must be brought within three (3) years of the date of the first notification of the measure involving an imposition not in accordance with the provisions of the Convention.’

Article 26 is deleted from the Convention and replaced by the following Article 27:

‘Article 27. Information exchange.

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 under paragraph 1 shall be kept secret in the same manner as information obtained under the domestic law of that Contracting State, and shall be communicated only to the persons or authorities (including courts and administrative bodies) responsible for the management or collection of the taxes referred to in paragraph 1 of their effective application or the prosecution of the non-compliance with such taxes, the determination of the remedies relating thereto, or the supervision of such activities. These persons or authorities shall use this information only for these purposes and may disclose the information in public hearings of the courts or in court judgements.

Notwithstanding the above, information received by a Contracting State may be used for other purposes where, under the law of both Contracting States, it may be used for such other purposes and the competent authority of the Contracting State providing the information authorizes such use.

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

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

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

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

4. Where a Contracting State requests information pursuant to this article, the other Contracting State shall use the measures to collect the information at its disposal for the purpose of obtaining the information requested, even if that other Contracting State may not need such information for its own tax purposes. The above obligation is limited by paragraph 3, but under no circumstances may Contracting States interpret such limitations as a basis for refusing the exchange of 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 the exchange of information solely because it is held by banks, other financial institutions, or by any person acting in a representative or fiduciary capacity, including designated agents, or because it relates to property rights in a person.”

A new Article 28 is inserted into the Convention:

‘Article 28. Assistance in the Collection.

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

2. For the purposes of this article, the term “tax credit” means any amount due in respect of taxes of any kind or designation payable on behalf of Contracting States, their political subdivisions or their local entities, to the extent that such taxation is not contrary to this Convention or to any other instrument to which Contracting States are parties. The term also covers the interests, administrative penalties and costs of collecting or establishing precautionary measures relating to that amount.

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

4. Where a tax claim of a Contracting State is of a nature such that that Contracting State may, under its domestic law, take precautionary measures to ensure its recovery, at the request of the competent authorities of that Contracting State, the competent authorities of the other Contracting State shall accept such debt for the purpose of adopting such interim measures. That other Contracting 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 Contracting State referred to first or its debtor was a person entitled to prevent its collection.

5. Notwithstanding paragraphs 3 and 4, a tax claim accepted by a Contracting State shall not, for the purposes of those paragraphs, be subject in that Contracting State to the statute of limitations or priority applicable to tax claims under its domestic law by reason 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 Contracting State the prelations applicable to tax claims under the law of the other Contracting State.

6. Procedures relating to 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 subsequent to the request for recovery made by a Contracting State under paragraphs 3 or 4, and prior to its collection 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 of the first Contracting State enforceable under its domestic law and the debtor of which was a person who at that time and under the law of that Contracting State could not prevent its collection; or

(b) in the case of an application under paragraph 4, a claim by the first Contracting State in respect of which that Contracting State, under its domestic law, may take interim measures to ensure its recovery,

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

8. In no case shall the provisions of this article be interpreted as obliging a Contracting State to:

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

(b) Take measures contrary to public order;

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

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

Renumber articles 27, 28 and 29 of the Convention to become articles 29, 30 and 31 respectively.

1. The following new paragraphs are inserted into the Protocol to the Convention:

‘1. Right to benefit from the Convention:

(a) Contracting States declare that their domestic rules and procedures with respect to abuses of the rule (including tax treaties) apply to the treatment of such abuses.

(b) Notwithstanding the provisions of this Convention, benefits granted under this Convention shall not be granted in respect of an income or property element where it is reasonable to consider, taking into account all relevant facts and circumstances, that the agreement or operation that directly or indirectly generates the right to receive such benefit has as its main objectives the acquisition of such benefit, except where it is determined that the granting of the benefit in such circumstances is in conformity with the object and purpose of the Convention.

(c) This Convention shall not prevent Contracting States from applying their domestic rules relating to international tax transparency, in the case of Spain, “Controlled Foreign Company rules” and, in the case of Mexico, preferential tax regimes and thin capitalization.

2. For the implementation of this Convention, it is understood that a fixed base shall be treated in accordance with the principles applying to permanent establishments.

3. For the purposes of Article 2.1, the term “Contracting States” shall be understood to also include political subdivisions in the case of Spain.”

2. Renumber paragraphs 1 and 2 of the Protocol to the Convention to become paragraphs 4 and 5 respectively.

3. Paragraphs 3, 4, 5, 6, 8, 12 and 13 of the Protocol to the Convention are deleted.

4. The following new paragraphs are inserted into the Protocol to the Convention:

‘6. In relation to Articles 11 and 12 of the Convention, if, after the entry into force of this Convention, Mexico signs an agreement or agreement to avoid double taxation with any other State that is a member of the Organisation for Economic Cooperation and Development or of the European Union, and such agreement or agreement provides for rates lower (including zero rate) than those set out in this Convention, such rates shall automatically replace the rates agreed in this Agreement from the date of entry into force of that agreement or agreement between Mexico and that other State.

7. The amounts paid for the provision of technical assistance services shall be subject to the provisions of Articles 7 or 14, as appropriate.

8. With regard to paragraphs 2 and 3 of article 13 of the Convention, it is understood that in the case of capital gains that cannot be taxed in the Contracting State where the immovable property is located, nothing shall prevent them from being taxed in accordance with the provisions of paragraph 3.

9. (A) In relation to article 13, paragraph 3, profits arising from the disposition of shares of a corporation resident of one Contracting State by a resident of the other Contracting State shall be subject to taxation in that other Contracting State only if each and all of the following conditions are met:

(a) the disposal of shares is carried out between members of the same group of companies, to the extent that the remuneration received by the alienator consists of the exchange of:

(i) shares issued by the acquiring company;

(ii) shares in a company owned by the acquirer himself; or

(iii) shares in a company that owns the acquirer.

(b) In the case of subparagraph (a), sub-sub-paragraph (ii), that prior to disposal the acquirer owned, directly or indirectly, at least 80 per cent of the voting shares and the capital of the company owned by the acquirer whose shares are transferred.

In the case of subparagraph (a), sub-sub-paragraph (iii), which before disposal, the company which owns the acquirer holds, directly or indirectly, at least 80 per cent of the shares entitled to vote and capital of the acquirer.

(c) immediately after the alienation, the alienator owns, directly or indirectly, 80 per cent or more of the voting rights and capital of the acquirer; or

where the alienator and the acquirer immediately after the alienation are owned by a corporation, directly or indirectly, in at least 80 per cent of its voting and capital shares.

In the case of subparagraph (a), sub-paragraph (ii), immediately after disposal, the alienator owns directly or indirectly, in at least 80 per cent of the voting rights and capital of the company that was owned by the acquirer.

(d) that the acquirer, the company owned by the acquirer, or the company that owns the acquirer, or the company that owns the alienator and the acquirer immediately after the alienation are, where appropriate, residents of one of the Contracting States, or of a country with which the exempt Contracting State has an information exchange agreement or agreement with at least as broad a content as the exchange of information provided for in article 27 and that such exchange is effective.

(B) For the purpose of determining profit on any subsequent disposal:

(a) the initial cost of the shares to the acquirer is determined on the basis of the cost to the alienator, increased by any cash or other remuneration other than shares or other fees paid; or

(b) the profit is calculated by another method which provides substantially the same result.

Notwithstanding the foregoing, if cash or other remuneration is received other than shares or other rights, the amount of the gain (limited to the amount of cash or other remuneration other than shares or other rights received) may be subject to taxation in the Contracting State of which the corporation whose shares are disposed of is resident.

10. With regard to article 13, paragraph 4, the term “recognised securities market” means:

(a) in Spain, a Spanish regulated market;

(b) in Mexico, the Mexican Stock Exchange; and

(c) any other securities market which the competent authorities agree to recognise for the purposes of this Article.’

5. Paragraph 7 of the Protocol to the Convention is deleted and replaced by the following:

‘11. For the purposes of article 23, paragraph 2, “rights relating to such immovable property” shall mean those rights which confer the power to dispose of such property.”

6. Paragraphs 9 and 10 of the Protocol to the Convention should be renumbered to paragraphs 12 and 13 respectively.

7. Paragraph 11 of the Protocol to the Convention is deleted and replaced by the following:

‘14. The provisions of Article 23 shall apply only where both Contracting States have in force simultaneously a property tax.'

8. The following paragraph is inserted into the Protocol to the Convention:

‘15. With regard to article 26 of the Convention, if, after the date of signature of this Protocol, Mexico agrees in an agreement or agreement to avoid double taxation concluded by Mexico with a third State, an arbitration-related provision that is substantially similar to the arbitration provision of the Model Tax Convention of the Organization for Economic Cooperation and Development, that provision shall automatically apply between Spain and Mexico from the date on which the agreement or agreement between Mexico and the third State enters into force.’

1. The Contracting States shall notify each other, through diplomatic channels, of compliance with their internal procedures necessary for the entry into force of this Protocol.

2. This Protocol shall enter into force after three (3) months from the date of the last of the Notes referred to in paragraph 1 and its provisions shall take effect:

(a) in respect of taxes withheld at source, on amounts paid or due from the date, including the date of entry into force of the Protocol;

(b) in respect of taxes calculated by reference to a fiscal year, for fiscal years beginning from the date, including on which the Protocol enters into force; and

(c) in all other cases, from the date, including when, the Protocol enters into force.

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

Done at Madrid on 17 December 2015 in two original copies in Spanish, both texts being equally authentic.

This Protocol shall enter into force on 27 September 2017, after a period of three months from the date of the last of the Notes by which the Contracting States reported compliance with the respective necessary internal procedures as set out in Article XVIII thereof.

Madrid, June 29, 2017.–The Technical General Secretary, Beatriz Larrotcha Palma.