AGREEMENT BETWEEN THE KINGDOM OF SPAIN AND THE REPUBLIC OF SENEGAL TO AVOID DOUBLE IMPOSITION AND PREVENT TAX EVASION ON RENT TAX
The Kingdom of Spain and the Republic of Senegal, wishing to conclude a convention to prevent double taxation and to prevent tax evasion in the area of income taxes, have agreed as follows:
CHAPTER I
Scope of the Convention
Article 1. Persons covered.
This Convention shall apply to persons resident in one or both Contracting States.
Article 2. Taxes covered.
1. This Convention shall apply to income taxes levied by each of the Contracting States, their political subdivisions or their local entities, whatever the system of their levy.
2. Income taxes shall be considered as all taxes on all income or any part of income, including taxes on earnings resulting from the disposal of movable or immovable property, taxes on the total amount of wages and salaries paid by enterprises, as well as taxes on capital gains.
3. The current taxes to which this Convention will apply are, in particular:
(a) In Spain:
(i) Personal Income Tax;
(ii) corporation tax;
(iii) Non-Resident Income Tax;
(hereinafter referred to as ‘the Spanish tax’).
(b) In Senegal:
(i) Corporate income tax;
(ii) Minimum corporate tax;
(iii) Personal income tax;
(iv) The flat-rate contribution payable by employers;
(v) the capital gain tax on built and unbuilt land;
(hereinafter referred to as the Senegalese 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 communicate to each other the relevant amendments made to their respective tax laws.
CHAPTER II
Definitions
Article 3. General definitions.
1. For the purposes of this Convention, unless the context of the Convention is different:
(a) ‘Spain’ means the Kingdom of Spain and, where the term is used geographically, it means the territory of the Kingdom of Spain, including the territorial sea and areas outside its territorial sea in which, under international law and under its domestic law, the Kingdom of Spain exercises or may exercise in future jurisdiction or rights of sovereignty over the seabed, its subsoil and superjacent waters, and its natural resources.
(b) ‘Senegal’ means the Republic of Senegal and, where the term is used geographically, it means the national territory, including its territorial waters, as well as maritime areas over which Senegal has jurisdiction or sovereignty rights, in accordance with international law.
(c) 'person' means natural persons, companies and any other grouping of persons;
(d) 'corporate' means any legal person or any entity which is considered a legal person for tax purposes;
(e) 'entrepreneur of one Contracting State' and 'entrepreneur of the other Contracting State' shall mean, respectively, an undertaking operated by a resident of one Contracting State and an undertaking operated by a resident of the other Contracting State;
(f) "international traffic" means any transport carried out by a ship or aircraft operated by an undertaking having its place of effective management in a Contracting State, except where the ship or aircraft is operated only between places situated in the other Contracting State;
(g) ‘competent authority’ means:
i. in Spain, the Minister of Economy and Finance or his authorized representative;
ii. in Senegal, the Minister of Finance or his authorized representative;
(h) 'national' means:
i. any natural person possessing the nationality of a Contracting State;
ii. any legal person, company of persons or association incorporated under the law in force in a Contracting State;
(i) 'a Contracting State' and 'the other Contracting State' shall mean Spain or Senegal, depending on the context.
2. For the purposes of the application of the Convention at any time by a Contracting State, any term or expression not defined in the Convention shall, unless a different interpretation is given in its context, have the meaning attributed at that time to it by the law of that State concerning taxes which are the subject of the Convention, the meaning attributed by the applicable tax law of that State to which it would result from other branches of the law of that State prevails.
Article 4. Resident.
1. For the purposes of this Convention, ‘resident of a Contracting State’ means any person who, under the law of that State, is subject to taxation in that State on the basis of his domicile, residence, address or any other criterion of a similar nature, including also that State and its political subdivisions or local entities. However, this term shall not 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 only of the State in which he has permanent housing at his disposal; if he has permanent housing at his disposal in both States, he shall be considered a resident only of the State with which he has closer personal and economic relations (centre of vital interests);
(b) If the State in which the person has the centre of his or her vital interests cannot be determined, or if he or she does not have permanent housing at his or her disposal in any of the States, he or she shall be considered a resident only of the State in which he or she habitually lives;
(c) If he or she habitually lives in both States or does not live in either State, he or she shall be considered a resident only of the State of which he or she is a national;
(d) if he is a national of either State 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 resident in both Contracting States, he or she shall be considered resident only in the Contracting State in which his or her place of effective management is located.
Article 5. Permanent establishment.
1. For the purposes of this Agreement, ‘permanent establishment’ means a fixed place of business through which an undertaking of a Contracting State carries out all or part of its business.
2. The term ‘permanent establishment’ includes, in particular:
(a) the head offices;
(b) branches;
(c) Offices;
(d) factories;
(e) Workshops;
(f) farms or plantations;
(g) mines, oil or gas wells, quarries or any other place of extraction of natural resources.
3. The expression ‘permanent establishment’ also includes:
(a) A construction, assembly, installation or related monitoring work or project, but only when the duration of such work, project or activities exceeds six months;
(b) the provision of services, in particular consultancy services, by a company through its employees or other personnel contracted for that purpose by the company, but in particular where such activities are carried out (for the same project or for related projects) in the country for a period or periods of more than three within a period of twelve months.
4. Notwithstanding the previous provisions of this Article, the term ‘permanent establishment’ shall be deemed not to include:
(a) the use of installations for the sole purpose of storing or displaying goods belonging to the undertaking;
(b) the maintenance of a warehouse of goods belonging to the undertaking for the sole purpose of storing or displaying them;
(c) the maintenance of a warehouse of 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 gathering information for the undertaking;
(e) the maintenance of a fixed place of business for the sole purpose of carrying out for the undertaking any other activity of a preparatory or auxiliary nature;
(f) the maintenance of a fixed place of business for the sole purpose of advertising the undertaking, providing information, scientific research or similar activities of a preparatory or auxiliary nature for such activities;
(g) 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 (f), provided that the whole activity of the fixed place of business resulting from that combination retains its preparatory or auxiliary 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 in a Contracting State on behalf of an undertaking of another Contracting State, that undertaking shall be deemed to have a permanent establishment in the first Contracting State in respect of the activities carried out by that person on behalf of the undertaking if that person:
(a) has and normally exercises in that State powers to conclude contracts on behalf of the undertaking, unless the activities of that person are limited to those referred to in paragraph 4 and if they were carried out through a fixed place of business, they would not determine the consideration of that fixed place of business as a permanent establishment in accordance with the provisions of that subparagraph; or
(b) without having such powers, it habitually maintains in that State a warehouse of goods from which it regularly delivers goods on behalf of the undertaking.
6. An undertaking of a Contracting State shall not be considered as having a permanent establishment in the other Contracting State merely because it engages in business in that State through a broker, a general commissioner or any other intermediary enjoying an independent status, provided that such persons act within the ordinary framework of their activity. However, where that agent carries out its activities exclusively or almost exclusively on behalf of that undertaking and between that agent and that undertaking, in its commercial and financial relations, has been agreed or imposed conditions other than those agreed between independent undertakings, it shall not be regarded as an agent with independent status under this paragraph.
7. The fact that a company resident of a Contracting State controls or is controlled by a company resident of the other Contracting State or engages in business in that other State (whether by permanent establishment or otherwise) does not in itself make any of these companies permanent establishment of the other State.
CHAPTER III
Income taxation
Article 6. Income from immovable property.
1. Income from immovable property (including income from agricultural or forestry holdings) situated in the other Contracting State may be taxed in that other State.
2. The term ‘real property’ shall have the meaning attributed to it by the law of the Contracting State in which the property is situated. In any event, that term shall include property attached to immovable property, live or dead livestock of 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 the exploitation or concession of the exploitation of mineral deposits, sources and other natural resources apply; ships and aircraft shall not be regarded as immovable property.
3. The provisions of paragraph 1 shall apply to income derived from direct use, lease or shareholding and from any other form of use of immovable property.
4. The provisions of paragraphs 1 and 3 shall also apply to income derived from the immovable property of an undertaking and to income derived from immovable property used to pursue an independent profession.
Article 7. Business profits.
1. The profits of an undertaking of a Contracting State may be taxed only in that State unless the undertaking carries out its business in the other Contracting State by means of 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 which it would have obtained from being a separate and separate undertaking carrying out the same or similar activities under the same or similar conditions shall be attributed to that permanent establishment 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, including management and general administrative expenses for the same purposes, shall be permitted, 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 by that permanent establishment of goods or goods for the enterprise.
5. As long as it is customary in a Contracting State to determine the profits attributable to permanent establishments on the basis of a distribution of the total profits of the enterprise among its various parties, the provisions of paragraph 2 shall not prevent that Contracting State from determining the taxable profits in that way; however, the method of distribution adopted shall be such that the result obtained conforms to the principles contained in this Article.
6. 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 doing otherwise.
7. 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 the operation of ships or aircraft in international traffic may be taxed only in the Contracting State in which the company's place of effective management is situated.
2. Profits from the operation of vessels engaged in inland waterway transport may be taxed only in the Contracting State where the place of effective management of the undertaking is situated.
3. If the place of effective management of a shipping or inland transport undertaking is on board a ship or a vessel, it shall be deemed to be situated in the Contracting State in which the base port of the ship or vessel is located or, if there is no such base port, in the Contracting State of which the person operating the ship or vessel is resident.
4. The provisions of paragraph 1 shall also apply to profits from participation in a pool, on a joint holding or on an international operating body.
Article 9. Associated enterprises.
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 commercial or financial relations between the two companies are subject to accepted or imposed conditions which differ from those to be agreed by independent undertakings, the profits that one of the companies would have obtained if there were no such conditions, but which did not occur because of them, may be included in the profits of that undertaking and may be taxed accordingly.
2. Where a Contracting State includes in the profits of an enterprise of that State - and consequently subjects to taxation - profits for which an enterprise of the other State has been taxed in that other State, and the profits thus included are profits that would have been realized by the enterprise of the State mentioned first if the terms agreed between the two companies had been those that would have been agreed between independent companies, the other State shall make the appropriate adjustment in the amount of the tax that has taxed those profits. The other provisions of this Convention shall be taken into account in determining such adjustment, and the competent authorities of the Contracting States shall consult each other where necessary.
3. The provisions of paragraph 2 shall not apply where, following judicial, administrative or other legal proceedings, a final decision has been issued which determines that the acts have led to the adjustment of profits under paragraph 2, are liable to impose on one of the undertakings concerned a penalty for fraud, serious fault or deliberate breach.
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 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 10 % of the gross amount of the dividends.
The provisions of this paragraph shall not affect the company's taxation of the profits with which dividends are paid.
3. ‘Dividends’ within the meaning of this Article shall mean the income from shares, shares or enjoyment bonds, parts of mines, parts of founders or other rights allowing participation in profits other than credit, as well as income from other social shares subject to the same tax regime as the income from shares under the law of the State of which the company distributing them is resident.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, resident of a Contracting State, carries out a business activity in the other Contracting State, of which the company paying the dividends is resident, through a permanent establishment situated there, or carries out an independent profession through a fixed base situated there, and the share generated by the dividends is effectively linked to that establishment or base. In such a case, the provisions of Article 7 or Article 14 of this Convention shall apply, as appropriate.
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 for which the dividends are paid is effectively linked to a permanent establishment or a fixed base situated in that other Contracting State, nor may it tax undistributed profits of the company, even if dividends paid or undistributed profits consist in whole or in part of profits or income from that other Contracting State.
Article 11. Interest.
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 10 per cent (10 per cent) of the gross amount of interest.
3. By way of derogation from paragraph 2, interest from a Contracting State shall be exempt from taxation in that other State if:
i. the debtor of interest is the Government of that Contracting State, a political subdivision or a local entity thereof; or
ii. interest is paid to the Government of the other Contracting State, a political subdivision or a local entity thereof, or to institutions or agencies (including financial institutions) wholly belonging to that other State or political subdivision or local entity.
4. The term ‘interest’ within the meaning of this Article means the income from claims of any kind, with or without a mortgage guarantee or a benefit-sharing clause of the debtor, and in particular the income from public securities and the income from obligations, including premiums and lots attached to such securities, as well as any other income equal to the income from capital provided by the tax legislation of the Contracting State from which such income originates. Penalties for late payment shall not be regarded as interest within the meaning of this Article.
5. The provisions of paragraphs 1, 2 and 3 shall not apply if the beneficial owner of the interest, resident of a Contracting State, engages in a business activity in the other Contracting State from which the interest derives, through a permanent establishment located in that other State, or pursues an independent profession through a fixed base situated therein, and the credit generated by the interest is effectively linked to that establishment or fixed base. In such a case, the provisions of Article 7 or Article 14 shall apply, as appropriate.
6. Interest shall be considered as originating in a Contracting State where the debtor is a resident of that Contracting State. However, where the debtor of interest, whether or not resident of a Contracting State, has in a Contracting State a permanent establishment or a fixed basis in respect of which the debt giving rise to the payment of the interest and bearing the burden of the interest has been incurred, the interest shall be deemed to have come from the Contracting State where the permanent establishment or fixed base is situated.
7. Where, on account of the special relations between the debtor and the beneficial owner, or of those between them and third parties, the amount of interest, having regard to the claim for which it is paid, exceeds the amount agreed by the debtor and the beneficial owner 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.
Article 12. Royalties.
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 10 per cent (10 per cent) of its gross amount.
3. The term ‘royalties’, as used in this Article, means remuneration of any kind paid for the use or right of use of copyrights in literary, artistic or scientific works, including cinematographic films and films, tapes or any other means of reproduction of the image or sound, patents, trademarks, designs, plans, formulas or secret procedures, as well as for the use or granting of use of industrial, commercial or scientific equipment, and for information relating to industrial, commercial or scientific experiences.
4. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, resident of a Contracting State, carries out a business activity in the other Contracting State from which the royalties come, through a permanent establishment situated in that other State, or pursues an independent profession by means of a fixed base situated in that State, and the right or for which the royalties are paid is effectively linked to that permanent establishment or to that fixed base. In such a case, the provisions of Article 7 or Article 14 shall apply, as appropriate.
5. The fees shall be deemed to come from a Contracting State where the debtor is the same State, a local authority or 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 or a fixed base, in respect of which the obligation to pay the royalties has been incurred and which bears the burden thereof, such fees shall be deemed to have come from the Contracting State in which the permanent establishment or fixed base is situated.
6. Where, on account of the special relations between the debtor and the beneficial owner, or of those between them and third parties, the amount of the royalties, having regard to the benefit for which they are paid, exceeds the amount that the debtor and the 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.
Article 13. Capital gains.
1. The 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, or movable property belonging to a fixed basis held by a resident of one Contracting State in the other Contracting State for the exercise of an independent profession, including gains from the disposal of that permanent establishment (only or with the enterprise as a whole), or from that fixed basis, may be subject to taxation in that other Contracting State.
3. Profits from the disposal of ships or aircraft operated in international traffic, from vessels used in inland navigation, or from movable property affected by the operation of such vessels, aircraft or vessels may be taxed only in the Contracting State in which the place of effective management of the undertaking is situated.
4. Profits that a resident of one Contracting State obtains from the disposal of shares that derive, directly or indirectly, more than 50 per cent (50 per cent) of the value of immovable property located in the other Contracting State may be taxed in that other Contracting State.
5. Profits resulting from the disposal of any property other than those referred to in the preceding paragraphs may be taxed only in the Contracting State in which the alienator resides.
Article 14. Independent professions.
1. An income obtained by a resident of a Contracting State from the pursuit of a liberal profession or other activities of an independent nature may only be taxed in that State, unless that resident normally has a fixed basis in the other Contracting State for the pursuit of his or her activities, or resides in that other State for one or more periods of more than 183 days over twelve months. If it has a fixed base or remains in that other State for the period or periods mentioned above, the income may be taxed in the other State but only to the extent that it is attributable to that fixed base or has been obtained from that other State during the period or periods mentioned above.
2. The term ‘liberal profession’ includes, in particular, independent scientific, literary, artistic, educational or pedagogical activities, as well as independent activities of doctors, engineers, lawyers, dentists, architects and accountants.
Article 15. Dependent professions.
1. Subject to articles 16, 18 and 19, salaries, wages and other similar remuneration obtained by a resident of a Contracting State on the basis of gainful employment may be subject to taxation in that State only, unless the employment is exercised in the other Contracting State. If the employment is exercised in the other Contracting State, the remuneration derived therefrom may be taxed 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 gainful employment in the other Contracting State may be taxed in the State referred to above only if:
(a) the recipient remains in the other State for a period or periods not to exceed a total of 183 days within a period of twelve months beginning or ending in the fiscal year concerned; and
(b) remuneration is paid for 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 or a fixed basis which the employer has in the other State.
3. Notwithstanding the foregoing provisions of this Article, remunerations earned on the basis of gainful employment on board a ship or aircraft operated in international traffic by an undertaking of a Contracting State may be taxed in the Contracting State in which the place of effective management of the undertaking is situated.
Article 16. Directors’ fees.
Shareholdings, attendance allowances, and other similar remunerations obtained by a resident of a Contracting State as a member of a Board of Directors or as a supervisory member of a company resident of the other Contracting State may be taxed in that other State.
Article 17. Entertainers and sportspersons.
1. By way of derogation from Articles 14 and 15, any income which a resident of a Contracting State obtains from the exercise of his personal activity in the other Contracting State as a performing artist, theatre, cinema, radio or television actor, or musician, or as an athlete, may be subject to taxation in that other State.
2. Notwithstanding the provisions of Articles 7, 14 and 15, where the income derived from the activities carried out by an artist or sportsman personally and 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 in which the activities of the artist or sportsman are carried out.
3. By way of derogation from paragraphs 1 and 2, income derived from the activities referred to in paragraph 1 carried out under an agreement or agreement in cultural matters between the Contracting States, their local authorities or public institutions shall be exempt from taxation in the Contracting State in which such activities are carried out if the visit to that State is financed wholly or substantially by one or both Contracting States or by one of their local authorities or public institutions.
Article 18. Pensions and annuities.
1. Subject to Article 19(2), pensions, annuities and other similar remuneration paid to a resident of a Contracting State on account of previous employment may only be taxed in that State.
2. For the purposes of this Article:
(a) 'pensions and other similar remuneration' means payments made periodically after retirement, as a result of past employment, or as compensation for damage suffered during past employment;
b ‘annuality’ means a defined amount payable periodically at specific times throughout their lifetime or for a specified or time-determined period, provided that payments are made after a detailed calculation of the monetary or equivalent value.
Article 19. Staff case.
(1) (a) Salaries, wages and other similar remuneration, excluding pensions, paid by a Contracting State or by one of its political subdivisions or local entities to a natural person for services rendered to that State or to that subdivision or entity, may 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 resident status of that State only to provide the services.
(a) Pensions paid to a natural person by a Contracting State or by one of its political subdivisions or local entities, directly or from funds constituted by them, on the basis of services rendered to that State or to that subdivision or entity, may only be subject to taxation in that State.
(b) Such pensions may, however, be subject to taxation in the other Contracting State only if the natural person is a resident and a national of that State.
3. The provisions of Articles 14, 15, 16 and 17 shall apply to salaries, salaries and other similar remunerations and to pensions paid for services rendered in the context of an entrepreneurial activity carried out by a Contracting State or by one of its political subdivisions or local authorities.
Article 20. Teachers and researchers.
Natural persons who, immediately before travelling to a Contracting State are residents of the other Contracting State and who, invited by the Government of the first Contracting State or by a university, educational institution, school, museum or other cultural institution of that first Contracting State, or within the framework of an official cultural exchange programme, remain in that Contracting State for a period of less than two consecutive years, for the purpose of teaching, lectures or research in that institution only, shall be exempt from taxation in that Contracting State on the remuneration related to that activity.
Article 21. Students and trainees.
Payments received to cover the costs of maintenance, study or practical training of a student or trainees who is, or was, immediately before arriving in a Contracting State, resident of the other Contracting State and who is in the first State for the sole purpose of study or practical training may not be subject to taxation in that State, provided that such payments come from sources outside that State.
Article 22. Other income.
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 shall 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, carries out an entrepreneurial activity in the other Contracting State by means of a permanent establishment situated therein, or engages in an independent profession by means of a fixed base equally situated therein, with which the right or for which the income is paid is effectively linked. In such a case, the provisions of Article 7 or Article 14 shall apply, as appropriate.
CHAPTER IV
Special provisions
Article 23. Method of eliminating double taxation.
1. In Spain, double taxation shall be avoided in accordance with the provisions of Spanish domestic law, or in accordance with the following provisions, without prejudice to the limitations imposed by Spanish law:
(a) Where a resident of Spain obtains income which, in accordance with the provisions of this Convention, may be taxed in Senegal, Spain shall permit:
i. the deduction of the income tax of that resident in an amount equal to the income tax actually paid in Senegal;
ii. the deduction of the underlying income tax, in accordance with the provisions of Spanish law. (The underlying tax is the tax actually paid by a subsidiary company for profits used to pay dividends, for the part corresponding to those dividends).
However, such deduction may not exceed the part of the income tax, calculated before the deduction, corresponding to the income that may be taxed in Senegal.
(b) Where, under any provision of this Convention, 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. As regards Senegal:
(a) Where a resident of Senegal obtains income which, in accordance with the provisions of this Agreement, may be taxed in Spain, Senegal shall deduct from the tax which imposes the income of that resident an amount equivalent 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 obtained in Spain.
(b) Where, in accordance with any provision of the Convention, income obtained by a resident of Senegal is exempt from taxes in Senegal, Senegal may, however, take into account exempt income for the purpose of calculating the amount of tax on the rest of the income of that resident.
Article 24. Non-discrimination.
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. The taxes applicable to a permanent establishment held by an undertaking of one Contracting State in the other Contracting State shall not be less favourable in that other Contracting State than those applicable to undertakings of that other State engaged in 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. Undertakings of a Contracting State whose capital, directly or indirectly, belongs to or is wholly or partly controlled 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.
4. 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, in order to determine the profits of that undertaking subject to taxation, under the same conditions as if they had been paid to a resident of the State referred to first.
5. By way of derogation from Article 2, the provisions of this Article shall apply to all taxes, whatever their nature or name.
Article 25. Mutual agreement procedure.
1. Where a person considers that the measures taken by one or both Contracting States involve or may entail for him or her an imposition that is not in conformity with the provisions of this Convention, irrespective of the remedies provided for by the domestic law of those States, he or she may submit his or her case to the competent authority of the Contracting State of which he or she is resident or, if applicable, to that of the Contracting State of which he or she 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 the complaint appears to it to be well founded and if it cannot in itself reach 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 an imposition not in conformity with the Convention. The agreement shall apply irrespective of the time limits provided for by the domestic law of the Contracting States.
3. The competent authorities of the Contracting States shall endeavour to resolve difficulties or doubts arising from the interpretation or application of the Convention by a friendly agreement. They may also consult with a view to avoiding 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.
Article 26. Exchange of information.
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 the domestic law of the Contracting States in respect of taxes of any kind or denomination collected on behalf of the Contracting States, their political subdivisions or their local entities, to the extent that such taxation is not contrary to the Convention. The exchange of information shall not be 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 disclosed to the persons or authorities (including courts and administrative bodies) responsible for the management or collection of taxes, for declaratory or executive procedures relating to such taxes, or for the determination of the tax appeals referred to in paragraph 1, or for the control thereof. Such persons or authorities shall use this information only for these purposes. They may disclose the information at public court hearings or in court judgements.
Without prejudice to the foregoing, information received by a Contracting State may be used for other purposes when this possibility is violated by the laws of the requesting State and when the competent authority of the State providing the information authorizes such use.
3. In no case may the provisions of paragraphs 1 and 2 be interpreted as obliging one of the Contracting States:
(a) take administrative measures contrary to its legislation and administrative practice or those of the other Contracting State;
(b) to provide information which cannot be obtained by virtue of its own legislation or in the exercise of its normal administrative practice, or by the other Contracting State;
(c) provide information revealing trade, industrial or professional secrets, commercial procedures or information whose communication is contrary to public policy.
4. If a Contracting State requests information in accordance with this Article, the other Contracting State shall use its powers to obtain the information requested even if it does not need such information for its own tax purposes. The obligation referred to in the preceding sentence shall be subject to the limitations provided for in paragraph 3, but in no case may such limitations be interpreted as allowing a Contracting State to refuse to communicate information solely on the ground that it has no interest in it within the national framework.
5. In no case may the provisions of paragraph 3 be interpreted as allowing a Contracting State to refuse to communicate information solely on the ground that it is in the possession of a bank, another financial institution, an agent or a person acting as an agent or fiduciary, or because such information is related to shares or shares in a person.
Article 27. Assistance in collection.
1. Contracting States shall assist each other in the collection of their tax claims. This assistance is not limited by Articles 1 and 2. The competent authorities of the Contracting States may, by mutual agreement, determine how this Article is to be applied.
2. The term ‘tax credit’ within the meaning of this Article means any amount due in respect of taxes of any kind or designation required by the Contracting States, their political subdivisions or their local authorities, to the extent that such taxation is not contrary to this Convention or to any other instrument to which the Contracting States are a party; the term also includes interests, administrative penalties and costs of collection or establishment of precautionary measures relating to that amount.
3. Where a tax claim of a Contracting State is enforceable under the law of that State and the debtor is a person who under the law of that State cannot at that time prevent the recovery, at the request of the competent authorities of that State, the competent authorities of the other Contracting State shall accept such tax claim for the purposes of its recovery. That other State shall collect the tax claim in accordance with its legislation relating to the application and collection of its own taxes as if it were its own tax claim.
4. Where a tax claim of a Contracting State is of a nature such that that State may, under its domestic law, take precautionary measures to ensure its recovery, at the request of the competent authorities of that State, the competent authorities of the other Contracting State shall accept such debt for the purpose of adopting such precautionary measures. That other State shall take interim measures in accordance with the provisions of its law as if it were a tax claim of its own, even if at the time of application of such measures the tax claim was not enforceable in the State referred to first or its debtor was a person entitled to prevent its collection.
5. By way of derogation from paragraphs 3 and 4, a tax claim accepted by a Contracting State for the purposes of those paragraphs shall not be subject in that State to the statute of limitations applicable to tax claims under its domestic law on account of their nature. Similarly, a tax claim accepted by a Contracting State for the purposes of paragraphs 3 or 4 shall not enjoy in that State the prelations applicable to tax claims under the law of the other Contracting State.
6. Proceedings concerning the existence, validity or amount of the tax claim of one Contracting State may not be initiated before the courts or administrative bodies of the other Contracting State.
7. Where at a time after the request for recovery made by a Contracting State pursuant to paragraph 3 or 4, and prior to its recovery and referral by the other Contracting State, the tax claim shall cease to be:
(a) in the case of an application under paragraph 3, a claim enforceable under the national law of the State referred to first and the debtor of which was a person who at that time and under the law of that State could not prevent its recovery; or
(b) in the case of an application under paragraph 4, a claim in respect of which, under the domestic law of the State referred to first, interim measures may be taken to ensure its recovery, the competent authorities of the State referred to first shall promptly notify the competent authorities of the other State of that fact and, as decided by that other State, the State referred to first shall suspend or withdraw its application.
8. In no case shall the provisions of this Article be construed as obliging a Contracting State to:
(a) take administrative measures contrary to its legislation or administrative practice or those of the other Contracting State;
(b) Take measures contrary to public order (ordre public);
(c) to provide assistance where the other Contracting State has not applied all the precautionary measures or recovery measures, as the case may be, available to it under its legislation or administrative practice;
(d) to provide assistance in cases where the administrative burden on that State is clearly disproportionate to the benefit that the other Contracting State might obtain.
Article 28. Members of diplomatic missions and consular posts.
Nothing in this Convention shall affect the tax privileges enjoyed by members of diplomatic missions or consular offices in accordance with the general principles of international law or under the provisions of special agreements.
CHAPTER V
Final provisions
Article 29. Entry into force.
1. Each Contracting State shall notify the other through diplomatic channels that the constitutional requirements for ratification of the Convention have been met.
2. This Convention shall enter into force on the first day of the third month following the date of receipt of the last of the notifications referred to in paragraph 1 and its provisions shall apply for the first time:
(a) In Spain:
i. as regards periodic accrual income taxes, taxes whose taxable period begins on or after the date of entry into force of the Convention;
ii. for other taxes, on the date of entry into force of the Convention.
(b) In Senegal:
i. in respect of taxes collected by withholding tax at source, amounts that may be required to be paid at the date of entry into force of the Convention
ii. as regards other income taxes, income earned during or after any calendar year or accounting year beginning on or beginning on 1 January of the year following the entry into force of this Agreement.
Article 30. Termination.
1. The Convention shall remain in force until it is denounced by one of the Contracting States. Any Contracting State may denounce the Convention through diplomatic channels, after a period of five years from the date of its entry into force, at least six months before the end of any calendar year.
2. In such a case, this Convention shall cease to apply in the two Contracting States:
a. In Spain:
i. as regards periodic accrual income taxes, income taxes whose taxable period starts from 1 January of the calendar year immediately following that of the complaint;
ii. as regards other taxes, from 1 January of the calendar year immediately following that of the complaint.
b. In Senegal:
i. in respect of taxes collected by withholding tax at source, amounts whose payment may be required on 1 January of the calendar year following the notification of the complaint; and
ii. for other income taxes, income earned during the calendar year or accounting year beginning on or after 1 January of the year following the notification of denunciation of this Agreement.
In faith, the signatories, duly authorized to do so, sign this Convention.
Done in duplicate at Dakar on 5 December 2006, in French and Spanish, the two texts being equally authentic.
For the Kingdom of Spain, a. r.,
For the Republic of Senegal,
The Minister for Foreign Affairs and International Cooperation,
Miguel A. Moratines
The Minister of State,
Minister for Foreign Affairs,
Cheikh Tidiane Gadio
PROTOCOL
At the time of signing the Convention between the Kingdom of Spain and the Republic of Senegal 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:
Anti-fraud clause.
1. Contracting States declare that their domestic laws and procedures relating to the abuse of rules (including treaties to eliminate double taxation) are applicable to combat such abuses, notwithstanding the provisions of any treaty or convention to prevent double taxation.
2. It is understood that the advantages of this Convention are not granted to persons who are not effective beneficiaries of income from the other Contracting State.
In faith, the signatories, duly authorized for this purpose, sign this Protocol.
Done in duplicate at Dakar on 5 December 2006, in French and Spanish, the two texts being equally authentic.
For the Kingdom of Spain, a. r.,
For the Republic of Senegal,
The Minister for Foreign Affairs and International Cooperation,
Miguel A. Moratines
The Minister of State,
Minister for Foreign Affairs,
Cheikh Tidiane Gadio
This Convention entered into force on 22 October 2012, 90 days after the date of receipt of the last of the notifications through diplomatic channels of compliance with the required constitutional requirements.
Madrid, December 15, 2014.–The Technical General Secretary of the Ministry of Foreign Affairs and Cooperation, Isabel Vizcaíno Fernández de Casadevante.