FRANCIS FRANCH BAHAMONDE
HEAD OF THE SPANISH STATE,
GENERALIZATION OF NATIONAL AFFAIRS
For what?
on 14 November 1974, the Plenipotentiary of Spain signed in Brasilia, together with the Plenipotentiary of the Federative Republic of Brazil, appointed in good and due form to that effect, the Convention on the Prevention of Double Taxation and the Prevention of Tax Evasion in the Field of Income Tax,
Viewed and examined
the 30 Articles which make up that Convention and the Protocol annexed thereto,
Having heard
the Committee on Foreign Affairs of the Spanish Courts, pursuant to article 14 of its Constitution,
I come to approve and ratify
what provision is made in this regard, as I hereby approve and ratify it, promising to comply with it, to observe it and to ensure that it is fulfilled and observed in a timely manner in all its parts, for the purpose of its further validation and firmness,
I order
to issue this instrument of ratification signed by
Me,
duly sealed and endorsed by the undersigned Minister for Foreign Affairs.
Given in Madrid on March 22nd, one thousand nine hundred seventy-five.
FRANCE FRANCE
The Minister for Foreign Affairs,
PEDRO CORTINA MAURI
[heading] CONVENTION BETWEEN THE SPANISH STATE AND THE FEDERATIVE REPUBLIC OF BRAZIL TO AVOID DOUBLE IMPOSITION AND PREVENT TAX EVASION ON RENT TAX
The Government of the Spanish State and the Government of the Federative Republic of Brazil, wishing to conclude a convention to prevent double taxation and to prevent tax evasion in the area of income taxes, has agreed as follows:
Article 1. Personal scope.
This Convention applies to persons resident in one or both Contracting States.
Article 2. Taxes which are the subject of this Convention.
1. This Convention applies to income taxes required by one of the Contracting States, irrespective of the system of levy.
2. Income taxes are those which tax the entire income or any part thereof, including taxes on earnings arising from the disposal of movable or immovable property, taxes on the amount of wages paid by enterprises (not including social security contributions), as well as taxes on capital gains.
3. The taxes to which this Convention applies are:
(a) In Spain:
(1) the General Income Tax on Natural Persons;
2. the General Income Tax on Companies and Other Legal Entities, including the special charge of 4 per 100 established by article 104 of Law 41/1964 of 11 June;
3) the following taxes on account: the Territorial Contribution on the Rustic and Pecuaria Wealth, the Territorial Contribution on Urban Wealth, the Personal Work Returns Tax, the Capital Income Tax and the Tax on Commercial and Industrial Activities and Benefits;
4) in Sahara, taxes (on income from labour and wealth) and on the profits of companies;
5. the Area Canon, Gross Product Tax and Special Profit Tax, regulated by Law 21/1974 of 27 June, on Hydrocarbon Research and Exploitation;
6. local income taxes (hereinafter referred to as the Spanish tax).
(b) In Brazil:
The income tax does not include the effects on surplus remittances and less important activities (hereinafter referred to as the ‘Brazilian tax’),
4. This Convention shall also apply to taxes of an identical or similar nature which are added to or replaced by existing taxes. The competent authorities of the Contracting States shall notify each other of any relevant amendments to their respective tax laws.
Article 3. General definitions.
1. This Convention, unless otherwise interpreted:
(a) the term ‘Spain’ means the Spanish State;
(b) the term ‘Brazil’ means the Federative Republic of Brazil;
(c) the words ‘one Contracting State’ and ‘the other Contracting State’ mean Spain or Brazil, as derived from the text;
(d) the term ‘persons’ includes natural persons, companies and any other grouping of persons;
(e) the term 'company' means any legal person or any entity to be considered a legal person, for tax purposes;
(f) the terms ‘undertaking of one Contracting State’ and ‘undertaking of the other Contracting State’ mean, respectively, an undertaking operated by a resident of one Contracting State and an undertaking operated by a resident of the other Contracting State;
(g) the term "international traffic" includes any voyage of a ship or aircraft operated by an undertaking of a Contracting State except where the journey is confined between points of the other Contracting State;
(h) the expression ‘competent authority’ means:
(a) in Spain:
the Minister of Finance, the Director General of Tax Policy or any other Authority to which the Minister delegates;
(b) in Brazil:
the Minister of Finance, the Secretary of Federal Receita or his authorized representatives.
2. For the purposes of the application of this Convention by a Contracting State, any expression not otherwise defined shall, unless the text requires a different interpretation, have the meaning attributed to it by the law of that Contracting State concerning taxes which are the subject of this Convention.
Article 4. Tax address.
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, place of address or any other criterion of a similar nature.
2. Where, pursuant to the provisions of paragraph 1, a natural person is resident in both Contracting States, the case shall be settled according to the following rules:
(a) This person shall be considered a resident of the Contracting State where he or she has a permanent dwelling at his or her disposal. If it has a permanent dwelling at its disposal in both Contracting States, it shall be considered a resident of the Contracting State with which it maintains closer personal and economic relations (centre of vital interests);
(b) if the Contracting State in which that 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 Contracting States, he or she shall be considered a resident of the Contracting State in which he or she habitually lives;
(c) if he or she is habitually resident in both Contracting States or does not live in either Contracting State, he or she shall be considered a resident of the Contracting State of which he or she is a national;
(d) if he is a national of both Contracting States or is not a national of either Contracting 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 of the Contracting State in which his or her place of effective management is located.
Article 5. Permanent establishment.
1. In this Agreement, the term ‘permanent establishment’ means a fixed place of business in which an undertaking carries out all or part of its activity.
2. The term ‘permanent establishment’ includes, in particular:
(a) a head office;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop;
(f) a mine, quarry or any other place of extraction of natural resources;
(g) construction or assembly work lasting more than six months.
3. The term ‘permanent establishment’ does not include:
(a) the use of an installation 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 purchasing goods or goods or collecting information for the undertaking;
(e) the maintenance of a fixed place of business for the sole purpose of advertising, providing information, conducting scientific research or carrying out other similar activities which are preparatory or auxiliary to the undertaking.
4. A person acting in a Contracting State on behalf of an undertaking of the other Contracting State, except in the case of an independent agent covered by paragraph 6, is deemed to constitute a permanent establishment in the State first mentioned if he has and habitually exercises in that State powers to conclude contracts on behalf of the undertaking, unless his activities are limited to the purchase of goods or goods for the enterprise.
5. An insurance undertaking in one of the Contracting States is considered to have a permanent establishment in the other Contracting State, from the moment that through a person, who does not fall into the category referred to in paragraph 6 below, receives premiums or ensures risks in that other State.
6. An enterprise of one Contracting State is not considered to have a permanent establishment in the other Contracting State on the sole ground that it engages in activities in that other State through a broker, a general commissioner, or any other mediator enjoying an independent status, provided that such persons act within the ordinary framework of their activity.
7. The fact that a corporation resident of a Contracting State controls or is controlled by a corporation resident of the other Contracting State or that it carries out activities in that other State (whether through a permanent establishment or otherwise), does not in itself make any of these companies permanent establishment of the other State.
Article 6. Real estate rents.
1. Income from immovable property may be taxed in the Contracting State in which such property is situated.
2. (a) Without prejudice to points (b) and (c), the term ‘real property’ shall be defined in accordance with the Law of the Contracting State in which the property is situated.
(b) The term ‘real property’ includes, in any event, attachments to real estate, livestock and equipment used on farms and forestry, the rights to which they apply, private law provisions relating to real estate, the use of immovable property and the right to receive variable or fixed fees for the exploitation or concession of the exploitation of mineral deposits, sources or other land wealth.
(c) Ships, vessels and aircraft are not considered real property.
3. The provisions of paragraph 1 apply to income derived from the direct use, lease or any other form of exploitation of immovable property.
4. The provisions of paragraphs 1 and 3 also apply to income derived from the immovable property of an enterprise and from immovable property used for the exercise of professional services.
Article 7. Benefits of companies.
1. The profits of an enterprise in one Contracting State may be taxed in that State only, unless the enterprise carries out operations in the other State through a permanent establishment located in that State. In the latter case, the profits of the company can be taxed in the other State but only to the extent that they can be attributed to the permanent establishment.
2. Where an enterprise of one Contracting State carries out in the other Contracting State through a permanent establishment situated in the other Contracting State, in each Contracting State the profits it would obtain from the permanent establishment if it were a separate undertaking carrying out the same or similar activities, under the same or similar conditions, and dealt entirely independently with the enterprise of 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, including management and general administrative expenses incurred for the same purposes, shall be permitted.
4. No benefit shall be attributed to a permanent establishment merely because it buys goods or goods for the undertaking.
5. 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.
Article 8. Shipping and air transport.
1. Profits from operating ships or aircraft in international traffic may be taxed only in the Contracting State in which the effective head office of the company is located.
2. If the seat of the place of effective management of a shipping company is on board a ship, it shall be deemed to be in the Contracting State where the base port of that ship is located, or, if there is no such base port, in the Contracting State where the person operating the ship is resident.
3. Profits arising from the operation of ships or aircraft in international traffic obtained by an undertaking of a Contracting State through participation in a pool or in a joint operation may be taxed only in the Contracting State in which the effective head office of the undertaking is situated.
Article 9. Associated enterprises.
When:
(a) an undertaking of a Contracting State participates, directly or indirectly, in the direction, control or capital of an undertaking of the other Contracting State; or
(b) the same persons participate, directly or indirectly, in the direction, control or capital of an undertaking of one Contracting State and of an undertaking of the other Contracting State, and, in either case, the two undertakings are, in their commercial or financial relations, bound by accepted or imposed conditions, which differ from those to be agreed by independent undertakings, the profits which one of the undertakings would have obtained if these conditions did not exist and which in fact did not occur because of them, may be included in the profits of that undertaking and subject to taxation accordingly.
Article 10. Dividends.
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 be taxed in the Contracting State in which the company paying the dividends resides, and in accordance with the laws of that State, but the tax thus required may not exceed 15 per cent of the gross amount of dividends.
This paragraph does not affect the company's taxation of profits from which dividends are paid.
3. The provisions of paragraphs 1 and 2 do not apply if the dividend beneficiary, resident of one Contracting State, has in the other Contracting State of which the corporation that pays the dividends is resident a permanent establishment with which the share generated by the dividends is effectively linked. In this case, the provisions of Article 7 apply.
4. The term ‘dividends’ used in this Article includes the income from shares, shares or enjoyment bonds, parts of mines, parts of founders or other rights that permit the participation of profits other than credit, as well as income from other shareholdings assimilated to the income from shares by the tax law of the Contracting State in which the distribution company resides.
5. Where a company resident of Spain has a permanent establishment in Brazil, this permanent establishment may be subject in this State to a tax withheld from the source and in accordance with the Brazilian Tax Law. However, the tax may not exceed 15 per 100 of the gross amount of profits of the permanent establishment, after deduction of corporate income tax relating to those profits.
However, the tax will only apply when the profits are actually transferred abroad.
Article 11. Interest.
1. Interest from one Contracting State paid to a resident of the other Contracting State may be taxed in that other State.
2. However, these interests may be taxed in the Contracting State from which they come, and in accordance with the law of that State, but the tax thus required may not exceed 15 per cent of the gross amount of interest.
3. The interest tax paid to financial institutions of a Contracting State on loans and credits granted for a period of at least 10 years and for the purpose of financing the acquisition of equipment and tooling goods may not exceed 10 per 100 of the gross amount of interest in the other Contracting State.
4. Notwithstanding the provisions of paragraphs 1 and 2:
(a) interest from a Contracting State and paid to the Government of the other Contracting State or one of its political subdivisions or any agency (including a financial institution) wholly owned by that Government or one of its political subdivisions is exempt from tax in the first Contracting State;
(b) the interest of the public debt, bonds or obligations issued by the Government of a Contracting State or any agency (including a financial institution) owned by that Government may be subject to taxation only in that State.
5. The term ‘interest’ used in this Article includes the income from the public debt, from bonds or bonds, with or without mortgage guarantee and entitled or not to participate in profits, and from credits of any kind, as well as any other income from which the tax legislation of the State from which the interest originates is equivalent to the income from the amounts lent.
6. The provisions of paragraphs 1 and 2 do not apply if the beneficiary of the interest, resident of one Contracting State, has in the other Contracting State from which the interest originates, a permanent establishment with which the claim generating the interest is effectively linked. In this case, the provisions of Article 7 apply.
7. The limitation set out in paragraph 2 does not apply to interest from a Contracting State paid to a permanent establishment of an enterprise of the other Contracting State located in a third State.
8. Interests are considered to come from a Contracting State when the debtor is the State itself, one of its political subdivisions, an entity, a local entity or a resident of that State. However, where the debtor of interest, whether or not it is resident of a Contracting State, has a permanent establishment in a Contracting State in respect of which the debt giving rise to the interest has been incurred and this establishment supports the payment thereof, the interest shall be deemed to have come from the Contracting State in which the permanent establishment is located.
9. Where, due to special relationships between the debtor and the beneficiary of the interest or between the two and any other person, the amount of interest paid, having regard to the claim for which it is paid, exceeds the amount that would have been agreed by the debtor and the beneficiary in the absence of such relations, the provisions of this Article shall apply only to the latter amount. In this case, the excess may be imposed in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.
Article 12. Royalties.
1. Fees from one Contracting State paid to a resident of the other Contracting State may be taxed in that other State.
2. However, these fees may be subject to taxation in the Contracting State from which they come, and in accordance with the law of that State, but the tax thus required may not exceed:
(a) Ten per cent of the gross amount of royalties derived from the use or use of copyrights in literary, artistic or scientific works (including film, film or tape recording of television or radio programmes, if any, produced by a resident of one of the Contracting States);
(b) Fifteen per cent in all other cases.
3. The term ‘royalties’ used in this article includes amounts of any kind paid for the use or grant of copyright on literary, artistic or scientific works (including film, film or tape recording television or radio programmes), patents, trademarks, designs, drawings, formulas or secret procedures, as well as for the use or granting of use of industrial, commercial or scientific equipment and information relating to industrial, commercial or scientific experience.
4. The fees are considered to come from a Contracting State when the debtor is the State itself, one of its political subdivisions, a local entity or a resident thereof. However, where the debtor of the royalties is resident or not resident in a Contracting State, it has in a Contracting State a permanent establishment to which the benefit for which the royalties are paid is linked and the establishment supports the payment thereof, the royalties shall be considered to be from the Contracting State where the permanent establishment is located.
5. The provisions of paragraphs 1 and 2 do not apply if the beneficiary of the royalties, resident of a Contracting State, has, in the Other Contracting State from which the royalties originate, a permanent establishment with which the right or property for which the royalties are paid is effectively linked. In this case, the provisions of Article 7 apply.
6. Where, due to special relations between the debtor and the beneficiary of the royalties or between the two and any other person, the amount of the fees paid, taking into account the benefit for which they are paid, exceeds the amount that would have been agreed by the debtor and the beneficiary in the absence of such relationships, the provisions of this Article shall apply only to the latter amount. In this case, the excess may be subject to taxation, in accordance with the law of each Contracting State, taking into account the other provisions of this Convention.
Article 13. Capital gains.
1. Gains from the disposal of immovable property, as defined in article 6, paragraph 2, may be taxed in the Contracting State in which they are located.
2. Gains from the disposal of movable property forming part of the assets of a permanent establishment held by an enterprise of one Contracting State in the other Contracting State, or from movable property belonging to a fixed base held by a resident of one Contracting State in the other Contracting State, including profits arising from the disposal of the permanent establishment (alone or with the enterprise as a whole) or from the fixed base, may be taxed in that other State. However, profits from the alienation of ships or aircraft used in international traffic and movable property affected by the operation of such ships or aircraft may be taxed only in the Contracting State where the effective headquarters of the company is located.
3. Profits arising from the disposal of any property or right other than those referred to in paragraphs 1 and 2 may be taxed in the two Contracting States.
Article 14. Independent professions.
1. Income obtained by a resident of a Contracting State for the provision of professional services or other independent activities of a similar nature may only be taxed in that State unless such services and activities are paid by a permanent establishment located in the other Contracting State or by a company resident of that other State. In this case, such income may be taxed in the other State.
2. The term ‘professional services’ includes, in particular, independent technical, scientific, literary, artistic, educational or educational activities, as well as independent activities of doctors, lawyers, engineers, architects, dentists and accountants.
Article 15. Dependent professions.
1. Without prejudice to the provisions of articles 16, 18, 19, 20 and 21, salaries, salaries and similar remuneration obtained by a resident of a Contracting State on the basis of employment may only be subject to taxation in that State, unless the employment is exercised in the other Contracting State. If employment is exercised in the latter State, the remuneration derived therefrom may be subject to taxation in that State.
2. Notwithstanding the provisions of paragraph 1, remunerations obtained by a resident of a Contracting State on the basis of employment in the other Contracting State may be subject to taxation in the former State only if:
(a) the beneficiary remains in the other State for one or more periods not exceeding a total of one hundred and eighty-three days in the course of the calendar year concerned; and
(b) remuneration is paid by, or on behalf of, a person who is not a resident of the other State; and
(c) Remuneration is not paid from a permanent establishment or a fixed basis which the person for whom the worker is employed has in the other State.
3. Notwithstanding the preceding provisions of this article, remunerations earned on the basis of employment on board a ship or aircraft in international traffic may be taxed in the Contracting State where the place of effective management of the undertaking is located.
Article 16. Directors’ fees.
1. Participations, attendance allowances and similar remunerations which a resident of a Contracting State obtains as a member of a Board of Directors or of another similar body of a company resident of the other Contracting State may be subject to taxation in that other State.
Article 17. Entertainers and sportspersons.
1. Notwithstanding the other provisions of this Convention, income earned by entertainment professionals, such as theatre, cinema, radio and television artists and musicians, as well as sportsmen, for their personal activities in this regard, may be subject to taxation in the Contracting State in which they act.
2. Notwithstanding the other provisions of this Convention, where the services referred to in paragraph 1 of this article are provided in one Contracting State by an enterprise of the other Contracting State; the income received by the enterprise for the provision of these services may be taxed in the first Contracting State.
Article 18. Pensions and annuities.
1. Without prejudice to the provisions of article 19, pensions and other similar remuneration not exceeding an amount equivalent to US$ 3,000 in the calendar year, paid to a resident of a Contracting State, may be subject to taxation only in this State. A party exceeding that limit may be subject to taxation in both Contracting States.
2. Annuities may be imposed only in the Contracting State of residence of the recipient.
3. In this Article:
(a) 'pensions and other similar remuneration' means periodic payments made after retirement and as a result of previous employment, or as compensation for damage suffered as a result of such employment;
(b) the term 'annuality' means a fixed amount, paid periodically, either on a life-long basis or for specified or determinable periods of time, and by virtue of an obligation to satisfy the annuity in return for a benefit equivalent in money or liable to be valued in money.
Article 19. Public remuneration.
1. Remuneration, excluding pensions, paid by a Contracting State, one of its political subdivisions or local entities, to a natural person, in consideration of services rendered to that State, political subdivision or local entity, may only be subject to taxation in that State.
Such remuneration may, however, be subject to taxation in the other Contracting State only if the services are provided in that State and if the payee is a resident of that State who:
(a) is a national of that State; or
(b) has not acquired the status of resident of that State for the sole purpose of providing such services.
2. Pensions paid by a Contracting State, one of its political subdivisions or local entities, directly or from funds made up of them, to a natural person in consideration for services rendered to that State, political subdivision or local entity, may only be subject to taxation in that State.
However, such pensions may only be taxed in the Contracting State of which the beneficiary is resident if the beneficiary is a national of that State.
3. The provisions of articles 15, 16 and 18 apply to remuneration or pensions paid in consideration of services rendered in the course of a commercial or industrial activity exercised by a Contracting State, one of its political subdivisions or local entities.
4. Pensions paid from social security funds of one Contracting State to a resident of the other Contracting State may only be taxed in the latter State.
Article 20. Teachers and researchers.
A natural person who is or was, in the period immediately prior to his visit to a Contracting State, a resident of the other Contracting State and who, at the invitation of the first Contracting State, or of a University, establishment of higher education, school, museum or other cultural institution of the first Contracting State, or who, fulfilling an official programme of cultural exchange, remains in that State for a period not exceeding two years for the sole purpose of teaching, giving lectures or conducting research in those Institutions, shall be exempt from taxation in that State in respect of the remuneration he receives as a result of such activities.
Article 21. Students.
1. A natural person who is or was, in the period immediately prior to his visit to a Contracting State, a resident of the other Contracting State and who remains temporarily in the first Contracting State only:
(a) As a student of a university, higher education institution or school of the first Contracting State;
(b) as a practitioner; or
(c) as a recipient of a scholarship, school aid or reward granted by a religious, charitable, scientific or educational organization, for the primary purpose of studying or carrying out research, shall be exempt from tax in the first Contracting State in respect of the sums it receives for its support, education or practice.
2. A student or practitioner who is or was, immediately prior to his visit to a Contracting State resident of the other Contracting State and who remains in the first Contracting State for the sole purpose of study or practice, shall be exempt from tax in the first Contracting State for a period not exceeding four consecutive calendar years in respect of the remuneration he receives for a job held in that State for the purpose of assisting his studies or training.
Article 22. Incomes not expressly mentioned.
The income of a resident of a Contracting State not expressly mentioned in the preceding articles may be taxed in the two Contracting States.
Article 23. Methods to avoid double taxation.
1. Where a resident of a Contracting State obtains income which, in accordance with the provisions of this Convention, may be taxed in the other Contracting State, the first State shall, in respect of paragraphs 2, 3 and 4, deduct from the income tax of that resident an amount equal to the income tax paid in the other Contracting State.
However, the amount deducted may not exceed the part of the income tax, calculated before deduction, corresponding to the income that may be taxed in the other Contracting State.
The provisions of this paragraph apply in Spain to both general and account taxes.
2. For the deduction referred to in paragraph 1, the interest and royalty tax shall be deemed to have been paid with the aliquots of 20 and 25 per 100, respectively.
3. Where a resident of Spain obtains dividends which, in accordance with the provisions of this Agreement, may be taxed in Brazil, Spain shall exempt these dividends from tax; but in order to calculate the tax corresponding to the other income of this resident, it may apply the same tax rate that would correspond if the dividends cited had not been exempted.
4. Where a resident of Brazil obtains dividends which, in accordance with the provisions of this Agreement, may be taxed in Spain, Brazil shall exempt those dividends from tax.
Article 24. Non-discrimination.
1. Nationals of one Contracting State shall not be subject in the other Contracting State to any tax or obligation relating thereto which they do not require or are more burdensome than those to which nationals of the latter State who are in the same conditions are or may be subject.
2. The term ‘national’ means:
(a) all natural persons possessing the nationality of a Contracting State;
(b) all legal persons, companies of persons and associations, established under the laws in force in a Contracting State.
3. A permanent establishment held by an Enterprise of one Contracting State in the other Contracting State shall not be subject to taxation in that State in a less favourable manner than the Enterprises of the latter State carrying out the same activities.
This provision does not oblige 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.
4. Enterprises of one 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 Contracting State referred to above to any tax or obligation relating thereto which is not or is more burdensome than those to which the like Enterprises of the first Contracting State are or may be subject.
5. This Article applies to all posts, even if they are not covered by this Convention.
Article 25. Mutual agreement procedure.
1. Where a resident of a Contracting State considers that the measures taken by one or both Contracting States entail or may entail for him a charge that is not in conformity with this Convention, irrespective of the remedies provided for by the national law of the States, he may submit his case to the competent authority of the Contracting State of which he is a resident.
2. This competent authority shall, if it finds the complaint well founded and if it itself is not in a position to adopt a satisfactory solution, make every effort to resolve the matter through an amicable agreement with the competent authority of the other Contracting State in order to avoid the imposition not in conformity with this Convention.
3. The competent authorities of the Contracting States shall endeavour to resolve, by amicable agreement, difficulties or to dispel doubts arising from the interpretation or application of this Convention. They may also agree to avoid double taxation in cases not covered by this Convention.
4. The competent authorities of the Contracting States may communicate directly with each other in order to reach the agreements referred to in the preceding paragraphs. Where it is considered that such agreements can be facilitated through personal contacts, an exchange of views may take place within a committee composed of representatives of the competent authorities of both Contracting States.
Article 26. Exchange of information.
1. The competent authorities of the Contracting States shall exchange the information necessary for the application of this Convention and of the domestic laws of the Contracting States relating to taxes covered by this Convention which are required in accordance with this Convention. The information thus exchanged shall be kept secret and shall not be disclosed to any person or authority which is not responsible for the settlement or collection of the taxes covered by this Agreement.
2. The provisions of paragraph 1 cannot under any circumstances be interpreted as imposing on one of the Contracting States the obligation:
(a) adopt administrative measures contrary to its legislation or administrative practice or those of the other Contracting State;
(b) to transmit information that cannot be obtained on the basis of their normal legislation or administrative practice or that of the other Contracting State;
(c) transmit information revealing trade, industrial, professional or commercial or industrial secrets, or information whose communication is contrary to public policy.
Article 27. Diplomatic and consular officials.
The provisions of this Convention do not affect the tax privileges enjoyed by diplomatic or consular officials in accordance with the general principles of international law or under special agreements.
Article 28. Methods of implementation.
The competent authorities of the Contracting States shall establish by mutual agreement the methods of application of this Convention.
Article 29. Entry into force.
This Convention shall be submitted for ratification in accordance with the respective constitutional systems and the corresponding instruments of ratification shall be exchanged in Madrid as soon as possible.
The Convention shall enter into force after the instruments of ratification have been exchanged and its provisions shall apply for the first time:
(a) in Spain:
I. for taxes withheld at source, on taxes payable at source or after the first day of January of the calendar year immediately following that in which the Convention enters into force;
II. as regards other income taxes, income earned during the fiscal year beginning there or after the first day of January of the calendar year immediately following that in which the Convention enters into force:
(b) in Brazil:
I. in respect of taxes levied by withholding tax on sums paid on or after the first day of January of the calendar year immediately following the date on which the Convention enters into force;
II. as regards other income taxes, amounts received during the fiscal year beginning on or after the first day of January of the calendar year immediately following that in which the Convention enters into force.
Article 30. Termination.
Any Contracting State may denounce this Convention after a period of three years from the date of its entry into force by means of a written notice of denunciation delivered to the other Contracting State through diplomatic channels, provided that such notice takes place until 30 June of any calendar year. In this case, this Convention shall apply for the last time:
(a) in Spain:
I. with regard to taxes levied on withholding tax at source, taxes payable before the expiry of the calendar year in which the complaint took place;
II. as regards other taxes, income obtained in the fiscal year beginning in the calendar year in which the complaint took place;
(b) in Brazil:
I. as regards taxes levied by withholding tax on sums paid before the expiry of the calendar year in which the complaint took place;
II. as regards the other taxes covered by this Agreement, the tax year beginning in the calendar year in which the complaint took place.
In faith, the Plenipotentiaries of the two Contracting States have signed and sealed this Convention,
Done at Brasilia, 14 November 1974, in duplicate, in the Spanish and Portuguese languages, both texts being equally reliable.
For the Government of Spain:
For the Government of Brazil:
José Pérez del Arco,
Antonio Azeredo de Silveira,
Ambassador of Spain
Minister for Foreign Affairs
[heading] PROTOCOL
At the time of signing the Convention to Prevent Double Taxation of Income between the Spanish State and the Federative Republic of Brazil, the undersigned, for this purpose duly authorized, agreed on the following provisions which constitute an integral part of this Convention.
1. Ad/article 2, paragraph 3 (a), (6).
The ‘arbitrium of establishment’ is considered to be included.
2. Ad/article 6, paragraph 1.
Income from agricultural or forestry holdings is considered to be included.
3. Ad/article 10, paragraph 2.
In the event that Brazil, after signing this Agreement, reduced the dividend tax referred to in Article 10, paragraph 2, paid by a Brazilian resident company to a resident of a third State. Not located in Ibero-America and holding at least 25 per 100 of the voting capital of the Brazilian resident company, an equal reduction shall automatically apply to the dividend tax paid to a Spanish resident company under similar conditions.
4. Ad/article 12, paragraph 2.
In the event that Brazil, after signing this Convention, reduces the tax on the fees referred to in Article 12, paragraph 2(b), paid by a resident of Brazil to a resident of a third State not located in Ibero-America, an equal reduction shall automatically be applied to the tax applicable to the fees paid to a resident of Spain who is in similar conditions.
5. Ad/article 12, paragraph 3.
The term ‘for information relating to industrial, commercial or scientific experience’ referred to in Article 12(3) includes income accruing from the provision of services and technical assistance.
6. Ad/article 14.
It is understood that the provisions of Article 14 shall also apply if the activities are carried out by a company.
7. Ad/article 24, paragraph 4.
The provisions of Brazilian law that do not allow the fees referred to in article 12, paragraph 3, paid by a Brazilian resident company to a resident of Spain who holds at least 50 per cent of the voting capital of that company, may be reduced to determine the taxable income of the Brazilian resident company, are applicable, notwithstanding the provisions of article 24, paragraph 4, of this Convention.
In the event that Brazil, after signing this Agreement, allows the fees referred to in Article 12, paragraph 3, paid by a Brazilian resident company to a resident of a third State not located in Ibero-America and holding at least 50 per cent of the voting capital of the Brazilian resident company to be deductible for the purpose of determining the profits of that company, this deductibility shall automatically apply, under similar conditions, to the Brazilian resident company that pays the royalties to a resident of Spain.
In faith, the Plenipotentiaries of the two Contracting States have signed and sealed this Protocol.
Done at Brasilia on 14 November 1974, in duplicate, in the Spanish and Portuguese languages, both texts being equally reliable.
For the Government of Spain:
For the Government of Brazil:
José Pérez del Arco,
Antonio Azeredo de Silveira,
Ambassador of Spain
Minister for Foreign Affairs
This Convention entered into force on 3 December 1975, the date on which the Exchange of Instruments of Ratification was made, in accordance with Article 29 thereof.
What is made public for general knowledge.
[ignore]Madrid, December 9, 1975.–The Technical Secretary General of the Ministry of Foreign Affairs, Enrique Thomas de Carranza.