JUAN CARLOS I
KING OF SPAIN
Since on 24 February 1995 the Plenipotentiary of Spain signed in Vienna, together with the Plenipotentiary of the Republic of Austria, both of whom were appointed in good and due form for that purpose, the Protocol amending the Convention between the Kingdom of Spain and the Republic of Austria. Austria to avoid double taxation in respect of income and property taxes, signed at Vienna on 20 December 1966,
Having regard to and examined the five points of the Agreement, granted by the Cortes General the authorization provided for in Article 94.1 of the Constitution,
I come to approve and ratify what is provided for in it; as I hereby approve and ratify it, promising to comply with it, observe it and ensure that it is implemented and observed in a timely manner in all its parts, for the purpose of which, for further validation and firmness, I command to issue this instrument of ratification signed by me, duly sealed and endorsed by the undersigned Minister for Foreign Affairs.
Given in Madrid on 11 September 1995.
JUAN CARLOS R.
The Minister for Foreign Affairs,
JAVIER SOLANA MADARIAGA
PROTOCOL AMENDING THE CONVENTION BETWEEN THE KINGDOM OF SPAIN AND THE REPUBLIC OF AUSTRIA TO AVOID DOUBLE IMPOSITION WITH REGARD TO RENT AND PATRIMONY TAXES, SIGNED AT VIENNA ON 20 DECEMBER 1966
The Kingdom of Spain and the Republic of Austria,
Desiring to conclude a Protocol amending the Convention between the Kingdom of Spain and the Republic of Austria on the prevention of double taxation in respect of income and property taxes, signed at Vienna on 20 December 1966 (hereinafter referred to as the Convention);
Have agreed as follows:
1. Article 2 of the Convention is deleted and replaced by the following:
‘Article 2.
(1) This Convention applies to taxes on income and property payable by each Contracting State, its political subdivisions or its local entities, whatever the system of its levy.
(2) Taxes on income and property are those which tax all or any part of the income or property, including taxes on profits resulting from the disposal of movable or immovable property, taxes on the amount of wages or salaries paid by enterprises, as well as taxes on capital gains.
(3) The current taxes to which this Convention specifically applies are:
(a) Austria:
1. Income tax (“die Einkommensteuer”);
2. Corporate tax (“die Kórperschaftsteuer”);
3. Land tax (“die Grundsteuer”);
4. The levy on agricultural and forestry enterprises;
5. The levy on the land value of undeveloped land.
(b) In Spain:
1. Personal Income Tax;
2. Corporate Tax;
3. The Wealth Tax;
4. Local taxes on income and wealth.
(4) The Convention shall also apply to taxes of an identical or similar nature which are established after the date of signature of the Convention and which are added to or replaced by existing taxes. The competent authorities of the Contracting States shall communicate to each other any significant changes made to their respective tax laws.’
2. Article 3, paragraph 1 (a), is deleted and replaced by the following:
“(a) The terms “one Contracting State” and “the other Contracting State” mean Austria or Spain as derived from the context; the term “Austria” means the Republic of Austria; the term “Spain” means the Spanish State and when used geographically, the territory of the Spanish State, including any area outside its territorial sea in which, under international law and under its domestic law, the Spanish State exercises or may exercise in the future jurisdiction or rights of sovereignty over the seabed, its subsoil and superjacent waters, and its natural resources.”
3. Article 11 of the Convention is deleted and replaced by the following:
‘Article 11.
(1) Interest from one Contracting State paid to a resident of the other Contracting State may be taxed in the latter State.
(2) However, these interests may be taxed in the Contracting State from which they come, in accordance with the law of that State, but the tax thus required may not exceed 5 per 100 of the amount of interest. The competent authorities of the Contracting States shall, by mutual agreement, determine how this limit is to be applied.
(3) 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 claims of any kind, as well as any other income that the tax law of the State from which the interest proceeds assimilates to the income from the amounts lent.
(4) 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.
(5) Interests are considered to come from a Contracting State where the debtor is the State itself, one of its political subdivisions, one of its local entities or a resident thereof. 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, interest shall be deemed to have come from the Contracting State in which the permanent establishment is located.
(6) Where due to special relations between the debtor and the beneficiary of the interest or between the two and any other person, the amount of interest paid, taking into account 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.’
4. Article 24 of the Convention is deleted and replaced by the following:
‘Article 24.
(1) In Austria, double taxation shall be avoided as follows:
(a) Where a resident of Austria obtains income or possesses assets which, under the provisions of this Convention, may be taxed in Spain, Austria shall exempt such income or property, without prejudice to subparagraphs (b) and (c);
(b) Where a resident of Austria obtains income which, in accordance with the provisions of Articles 10, 11 and 12, may be taxed in Spain; Austria shall deduct from tax an amount equivalent to the tax paid in Spain in respect of the income of that resident. However, this deduction may not exceed the part of the tax, calculated before the deduction, corresponding to the income obtained in Spain;
(c) Dividends, referred to in article 10, paragraph 2 (a), paid by a company resident in Spain to a company resident in Austria shall, in accordance with the applicable provisions contained in Austrian law, be exempt from Austrian tax;
(d) Where, in accordance with any provision of the Convention, the income obtained by a resident of Austria or the property he holds is tax-exempt in Austria, Austria may, however, take into account the income or property exempted for the purpose of calculating the amount of tax on the rest of the income or property of that resident;
(2) In Spain double taxation shall be avoided, in accordance with the applicable provisions contained in Spanish legislation, as follows:
(a) Where a resident of Spain obtains income or possesses assets which, in accordance with the provisions of this Convention, may be taxed in Austria, Spain shall allow the deduction of the income tax or assets of that resident from an amount equal to the tax actually paid in Austria.
However, such deduction may not exceed the part of the Income or Property Tax calculated before the corresponding deduction, as the case may be, to the income or property that may be subject to taxation in Austria;
(b) In the case of dividends paid by a company resident in Austria to a company resident in Spain and directly detaining at least 25 per cent of the capital of the company paying the dividends, the proportion of the tax actually paid by the company in question in respect of the profits from which the dividends are paid shall be taken into account, in addition to the amount deductible under subparagraph (a) of this subparagraph, in the determination of the tax credit, in the amount corresponding to such dividends, provided that such amount is included, for this purpose, in the taxable basis of the company receiving the dividends.
Such deduction, together with the deduction applicable to dividends under subparagraph (a) of this paragraph, may not exceed the part of the Income Tax, calculated before the deduction, attributable to income subject to taxation in Austria.
In order to apply this sub-paragraph, the participation in the paying company of dividends shall be maintained on a continuous basis during the two fiscal years preceding the day on which the dividends are paid;
(c) When under any provision of the Convention. Agreement, the income obtained by a resident of Spain or the assets he holds are exempt from taxation in Spain, Spain may, however, take into account the income or assets exempted for the calculation of the tax on the rest of the income or assets of that resident.
(3) Income obtained by a resident of a Contracting State, which is considered by that Contracting State to be subject to taxation in accordance with this Convention in the other State, may, however, be taxed in the first State if, after mutual agreement procedure have been conducted, the other Contracting State exempts such tax income under this Convention.’
5. This Protocol shall be ratified, and the instruments of ratification shall be exchanged in Madrid as soon as possible.
The Protocol shall enter into force on the first day of the second month following the day on which the exchange of instruments of ratification takes place and its provisions shall take effect with respect to taxes corresponding to any tax period commencing after 31 December of the calendar year in which the exchange of instruments of ratification took place,
The provisions of paragraph 3 of this Protocol relating to Article 11 shall take effect in respect of income obtained from the date on which the instruments of ratification are exchanged, but no later than 1 January 1995, irrespective of the first.
In faith, the Plenipotentiaries of Contracting States, duly authorized to do so, have signed and sealed this Protocol.
Done at Vienna on 24 February 1995, in duplicate in English, German and Spanish, all texts being equally reliable. If the texts differ, the English text shall prevail.
For the Kingdom of Spain
For the Republic of Austria,
Miguel Angel Ochoa Brun
,
Ambassador
Wolfgang Nolz
,
Head of Section of the Federal Ministry of Finance
This Protocol, whose instruments of ratification have been exchanged in Madrid on 19 September 1995, shall enter into force on 1 November 1995, the first day of the second month following that on which the said exchange took place, as set out in paragraph 5 thereof.
What is made public for general knowledge.
Madrid, September 21, 1995. –The Technical Secretary General of the Ministry of Foreign Affairs, Antonio Bellver Manrique.