Cabo Verde

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

1. This Convention applies to income taxes payable by each Contracting State, its political, administrative or local subdivisions, whatever the system of its levy.

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

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

(a) in Spain:

(i) Personal Income Tax;

(ii) corporation tax;

(iii) non-resident income tax; and

(iv) Local income taxes;

(hereinafter referred to as ‘the Spanish tax’)

(b) In Cape Verde:

(i) the single income tax (IUR);

(ii) the single property tax, in respect of gains from the disposal of movable or immovable property, as well as capital gains taxes; and

(iii) the fire rate;

(hereinafter referred to as ‘Cape-Verdian tax’).

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

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

(a) the term ‘Spain’ means the Kingdom of Spain and, used geographically, means the territory of the Kingdom of Spain, including its internal waters, airspace, territorial sea and areas outside its territorial sea where, 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 ‘Cape Verde’ means the territory of the Republic of Cape Verde situated on the West African coast, including its internal waters, airspace, territorial sea and areas outside its territorial sea where, in accordance with international law and Cape Verdean law, the Republic of Cape Verde exercises or may exercise in future jurisdiction or rights of sovereignty over the seabed, its subsoil and superjacent waters, and its natural resources;

(c) the words ‘one Contracting State’ and ‘the other Contracting State’ mean Spain or Cape Verde, 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 Finance and Civil Service or his authorised representative;

(ii) in Cape Verde: the member of the Government responsible for the area of finance, or the Director-General for Contributions and Taxes or their authorized representatives;

(j) the term 'national' means:

(i) a natural person possessing the nationality 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) ‘economic activity’ includes commercial, industrial, agricultural or fisheries activities, as well as the provision of professional services and 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 therein shall have, unless its context is affected by a different interpretation, the meaning attributed at that time to it by the law of that State relating to the taxes which are the subject of the Convention, the meaning attributed by the tax law over 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, administrative or local subdivisions. This term does not, however, include persons who are subject to taxation in that State solely for the income they obtain from sources located in that State.

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

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

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

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

(d) if he is a national of both States or is not a national of either State, the competent authorities of the Contracting States shall decide the case by mutual agreement.

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

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

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

(a) the head offices;

(b) branches;

(c) Offices;

(d) factories;

(e) workshops; and

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

3. The term ‘permanent establishment’ also includes:

(a) a construction, installation or assembly work or project, but only where such works or projects continue for a period exceeding twelve months;

(b) the provision of services in a Contracting State, including consultancy services, by an undertaking of the other Contracting State, through employees or other personnel contracted by the undertaking for that purpose, where such services are extended, for the same project, for a period or periods exceeding 183 days within a period of twelve 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 that such a fixed place of business is a permanent establishment in accordance with the provisions of that paragraph.

6. An undertaking is not considered to have a permanent establishment in a Contracting State merely because it carries out its activities in that State through a broker, a general commissioner or any other independent agent, provided that such persons act within the ordinary framework of their activity.

7. The fact that a company resident of a Contracting State controls or is controlled by a company resident of the other Contracting State, or that it engages in business activities in that other State (whether by permanent establishment or otherwise), does not by itself make any of these companies permanent establishment of the other State.

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

2. The term ‘real property’ shall have the meaning attributed to it by the law of the Contracting State in which the property is situated. In any event, the term includes property attached to immovable property, livestock and equipment used on agricultural and forestry holdings, rights to which the private law provisions relating to real estate, the use of immovable property and the right to receive fixed or variable payments in exchange for exploitation, or the granting of exploitation, of mineral deposits, sources and other natural resources apply; vessels, 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 shares or other rights directly or indirectly assigns to the owner of such shares or rights, the right to the enjoyment of immovable property, income derived from direct use, lease or shareholding, 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. If the place of effective management of a shipping undertaking is on board a ship, it shall be deemed to be located in the Contracting State where the base port of the ship is located, or if there is no such base port, in the Contracting State of which the person operating the ship is resident.

3. The provisions of paragraph 1 also apply to profits from participation in a pool, on a joint holding or on an international holding 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 undertaking of that State - and consequently subjects to taxation - the profits on which an undertaking of the other State has been taxed in that other Contracting State, and the profits thus included are profits which would have been realized by the undertaking of the State mentioned first if the terms agreed between the two companies had been those agreed between independent undertakings, that other State shall make the adjustment that would result in the amount of the tax that has taxed those profits provided that the other State considers that the adjustment is justified. 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:

(a) 0 per cent of the gross amount of dividends if the beneficial owner is a company (other than a company of persons) holding directly at least 25 per cent of the capital of the company paying the dividends;

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

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

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

4. The provisions of paragraphs 1 and 2 do not apply if the beneficial owner of the dividends, resident of one Contracting State, carries out in the other Contracting State, of which the company paying the dividends is resident, a business activity through a permanent establishment located there, and the shareholding generated by 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.

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

2. However, such interest may also be taxed in the Contracting State from which it comes and in accordance with the law of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax thus required may not exceed 5 per cent of the gross amount of interest. The competent authorities of the Contracting States shall, by mutual agreement, lay down the detailed rules for the application of this limit.

3. By way of derogation from paragraph 2, interest from one Contracting State and paid to a resident of the other State shall be exempt from taxation in the first State if the recipient coincides with the beneficial owner and:

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

(b) The payer of the interest is the State from which it originates, or one of its political subdivisions, local authorities or public bodies;

(c) interest is paid on the basis of a loan or credit due to that State or to one of its political subdivisions, local authorities or export credit agency, or granted, granted, guaranteed or insured by any of the above;

(d) is a financial institution;

(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.

5. The provisions of paragraphs 1, 2 and 3 do not apply if the beneficial owner of the interest, resident of one Contracting State, carries out in the other Contracting State, from which the interest derives, a business 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 deemed to come from a Contracting State where the debtor is a resident of that State. However, where the debtor of interest, whether or not he is resident of a Contracting State, has in a Contracting State a permanent establishment in respect of which the debt giving rise to the payment of the interest and bearing the burden thereof has been incurred, the interest shall be deemed to have come from the Contracting State in which the permanent establishment is situated.

7. Where, on account of special relations between the debtor and the beneficial owner, or between them and third parties, the amount of interest, having regard to the claim for which it is paid, exceeds that agreed upon by the debtor and the beneficial owner in the absence of such relations, the provisions of this article shall apply only to the latter amount. In such a case, the excess may be imposed in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.

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

2. However, such fees may also be subject to taxation in the Contracting State from which they come and in accordance with the law of that State, but if the beneficial owner of the royalties is a resident of the other Contracting State the tax thus required may not exceed 5 per cent of the gross amount of such fees. The competent authorities of the Contracting States shall, by mutual agreement, lay down the detailed rules for the application of this limit.

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

4. The provisions of paragraphs 1 and 2 do not apply if the beneficial owner of the royalties, resident of one Contracting State, carries out in the other Contracting State, from which the royalties come, a business activity through a permanent establishment located in that other State and the right or for which the royalties are paid is effectively linked to that permanent establishment. In such cases the provisions of Article 7 shall apply.

5. The fees shall be deemed to come from a Contracting State where the debtor is a resident of that State. However, where the debtor of the royalties, whether or not he is a resident of a Contracting State, has in one of the Contracting States a permanent establishment in respect of which the obligation to pay the royalties has been entered into and which bears the burden thereof, those royalties shall be deemed to have come from the Contracting State in which the permanent establishment is situated.

6. Where, on account of the special relations between the debtor and the beneficial owner of the royalties, or of those between them and third parties, the amount of the royalties, taking into account the use, right or information for which they are paid, exceeds that for which the debtor and beneficial owner would have agreed in the absence of such relationships, the provisions of this article shall apply only to the latter amount. In such a case, the excess may be imposed in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.

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

2. Gains 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 % of immovable property located in the other Contracting State may be taxed in that other State.

5. Profits resulting from the disposal of shares or other rights which, directly or indirectly, grant the owner of such shares, 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, 16 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 the basis of employment in the other Contracting State may be taxed only in the State referred to above if:

(a) the recipient remains in the other State for a period or periods of not more than 183 days together in any twelve-month period beginning or ending in the fiscal year concerned; and

(b) remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and

(c) Remuneration is not borne by a permanent establishment 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 or other similar body 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. By way of derogation from Articles 7 and 14, where income derived from the personal activities of an artist or sportsman, in that capacity, is attributed not to the artist or sportsman himself, but to another person, such income may be taxed in the Contracting State where the activities of the artist or sportsman are carried out.

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) Salaries, salaries and other similar remuneration paid by a Contracting State or by one of its political, administrative or local subdivisions to a natural person on account of services rendered to that State or to that subdivision or entity may be subject to taxation only 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) Notwithstanding paragraph 1, pensions and similar remuneration paid by a Contracting State or by one of its political subdivisions or local entities, either directly or from constituted funds, to a natural person on account of services rendered to that State or to that political or administrative subdivision or local entity, may only be subject to taxation 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. Articles 14, 15, 16 and 17 apply to salaries, salaries, pensions and other similar remuneration paid for services rendered in the context of an enterprise carried out by a Contracting State or by one of its political, administrative or local subdivisions.

1. A natural person who is or has been a resident of a Contracting State immediately prior to his arrival in another Contracting State and who, at the invitation of a university, higher education institution, school or other educational institution recognized as a non-profit institution by the Administration of that other State, remains in that other Contracting State for a period not exceeding two years from the date of his arrival in that State, for the sole purpose of engaging in education, research or both in that institution, shall be exempt from taxation in that other Contracting State with respect to the remuneration he receives as a result of such educational or research activities.

2. This Article shall apply only to income from research if the natural person carries out such research in the public interest, and not primarily for the benefit of a private activity.

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 income derived from immovable property within the meaning of Article 6(2), where the beneficiary of such income, resident of a Contracting State, engages in a commercial or industrial activity in the other Contracting State through a permanent establishment situated 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. In Spain, double taxation shall be avoided either in accordance with the provisions of domestic law or in accordance with the following provisions, subject to Spanish domestic law:

(a) Where a resident of Spain obtains income which, under the provisions of this Convention, may be taxed in Cape Verde, Spain shall permit:

(i) the deduction of that resident's income tax equal to the income tax paid in Cape Verde;

(ii) 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, this deduction may not exceed the part of the income tax, calculated before the deduction, corresponding to the income that may be taxed in Cape Verde.

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

2. In Cape Verde, double taxation shall be avoided in accordance with the applicable provisions of domestic law, provided that they are not contrary to the general principles set out in this subparagraph, as follows:

(a) Where a resident of Cape Verde obtains income which, under the provisions of this Convention, may be taxed in Spain, Cape Verde shall allow the deduction of the income tax of that resident equal to the income tax paid in Spain.

However, this deduction may not exceed the part of the income tax, calculated before the deduction, corresponding to the income that may be taxed in Spain.

(b) Where under any provision of this Convention the income obtained by a resident of Cape Verde is tax-exempt in Cape Verde, Cape Verde may, however, take into account the exempted income in calculating the tax on the rest of the income of that resident.

3. If the method of charging is applied for the elimination of double taxation and for the purposes of its deduction as a tax paid in Spain, the tax paid in Cape Verde shall be considered to include the tax that would have been payable in Cape Verde if it had not been reduced or if Cape Verde had not renounced it, in accordance with the provisions of Law 89/IV/93 of 13 December and its amendments.

The provisions of this paragraph shall apply for five years after the date of entry into force of this Convention.

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

2. Permanent establishments held by an undertaking of one Contracting State in the other Contracting State shall not be subject to taxation in that State in a less favourable manner than undertakings of that other State carrying out the same activities. This provision may not be interpreted as obliging a Contracting State to grant to residents of the other Contracting State the personal deductions, reliefs and tax reductions it grants to its own residents in view of their marital status or family burdens.

3. Unless the provisions of Article 9(1) of Article 11(7) or Article 12(6) apply, interest, royalties and other expenses paid by an undertaking of a Contracting State to a resident of the other Contracting State shall be deductible to determine the profits subject to taxation of that undertaking, under the same conditions as if they had been paid to a resident of the State referred to first.

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 which is 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 or administrative 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 both States.

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.

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. This Convention shall be subject to ratification. Instruments of ratification shall be exchanged through diplomatic channels as soon as possible.

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

(i) in respect of periodic accrual taxes, in respect of income taxes for the fiscal year beginning on or after the date of entry into force of the Convention;

(ii) 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:

(i) in respect of periodic accrual taxes in respect of income taxes for the fiscal year beginning on or after the first day of January of the calendar year following the calendar year in which the complaint is notified;

(ii) 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 in duplicate in Madrid on 5 June 2017 in the Spanish and Portuguese languages, the two texts being equally authentic.

At the time of signing the Convention between the Kingdom of Spain and the Republic of Cape Verde on the prevention of double taxation and tax evasion in the area of income taxes, the signatories have agreed on the following provisions which form an integral part of the Convention:

I. Right to benefit from the Convention.

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

(b) The benefits of this Convention shall not be accorded to a person other than the actual beneficiary of income from the other Contracting State.

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

II. Ad Article 4.

As long as Cape Verde maintains for its residents a system of taxation in accordance with the principle of territoriality, any person who, under Cape Verdean domestic law, is deemed to be resident in Cape Verde by reason of his residence, domicile, place of place of effective management or any other criterion of a similar nature, shall be considered resident in Cape Verde for the purposes of article 4 of this Convention.

III. Ad Article 10.3.

In the case of Cape Verde, the term ‘dividends’ includes income derived from shared accounts as well as profits derived from the liquidation of a company.

IV. Ad Article 15.

In the case of Cape Verde, it is understood that the term ‘other similar body’ includes the Fiscal Council of a company.

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

Done in duplicate in Madrid on 5 June 2017 in the Spanish and Portuguese languages, the two texts being equally authentic.

This Convention shall enter into force on 7 January 2021, within three months of the date of receipt of the last instrument of ratification, as provided for in Article 27 thereof.

Madrid, November 25, 2020.–Technical Secretary General José María Muriel Palomino.