PROTOCOL BETWEEN THE KINGDOM OF SPAIN AND THE REPUBLIC OF INDIA, AMENDING THE CONVENTION AND PROTOCOL BETWEEN THE KINGDOM OF SPAIN AND THE REPUBLIC OF INDIA TO AVOID DOUBLE IMPOSITION AND PREVENT TAX EVASION ON RENT AND PATRIMONY IMPOSED IN NEW DELHI ON 8 FEBRUARY 1993
The Kingdom of Spain and the Republic of India;
Desiring to conclude a Protocol (hereinafter referred to as the ‘Amendment Protocol’) amending the Convention and the Protocol between the Kingdom of Spain and the Republic of India to prevent double taxation and prevent tax evasion in respect of income and property taxes, signed at New Delhi on 8 February 1993, which entered into force on 12 January 1995 (hereinafter referred to as the ‘Convention’);
Have agreed as follows:
Article 1
Article 2(a) (including taxes) is deleted and replaced by the following:
‘(a) in Spain:
(i) Personal Income Tax;
(ii) corporation tax;
(iii) Non-Resident Income Tax; and
(iv) the assets tax;
(hereinafter referred to as “Spanish tax”).’
Article 2
The single paragraph of Article 10 (Partners) is numbered as paragraph 1, after which the following subparagraph is inserted:
‘2. Where a Contracting State includes in the profits of an enterprise of that State - and consequently subjects to taxation - the profits on which an enterprise of the other Contracting State has been taxed in that other State and that other State recognizes that the profits thus included are profits which would have been realized by the enterprise of the State concerned in the first place if the terms agreed between the two companies had been those agreed between independent undertakings, that other State shall make the adjustment that would result in the amount of the tax that has taxed those profits. In determining such adjustment, account shall be taken of the other provisions of this Convention and the competent authorities of the Contracting States shall be consulted where necessary."
Article 3
Article 28 (Exchange of information) of the Convention is deleted and replaced by the following article:
‘Article 28. Exchange of information.
1. The competent authorities of the Contracting States shall exchange information (including certified documents or copies of documents) which is likely to be of interest to implement the provisions of this Convention or to the administration or application of national law relating to taxes of any kind and designations required by the Contracting States, their political subdivisions or their local authorities, to the extent that such taxation is not contrary to the Convention. The exchange of information is not limited by Articles 1 and 2.
2. Information received by a Contracting State pursuant to paragraph 1 shall be kept secret in the same way as information obtained under the domestic law of that State and shall be communicated only to the persons or authorities (including courts and administrative bodies) responsible for the management or collection of the taxes referred to in paragraph 1 of their effective application or the prosecution of the non-compliance with such taxes, the determination of the remedies relating thereto, or the supervision of such activities. Such persons or authorities shall use this information only for those purposes. They may disclose the information at public court hearings or in court judgements.
Notwithstanding the provisions of the preceding paragraph, information received by a Contracting State may be used for other purposes where, under the law of both Contracting States, such information may be used for the same purposes.
3. In no case may the provisions of paragraphs 1 and 2 be interpreted as obliging a Contracting State to:
(a) take administrative measures contrary to its legislation and administrative practice or those of the other Contracting State;
(b) provide information (including certified documents or copies of documents) that cannot be obtained on the basis of its own legislation or in the exercise of its normal administrative practice, or of those of the other Contracting State;
(c) providing information revealing business, industrial, commercial or professional secrecy, or an industrial procedure, or information the communication of which is contrary to public policy
(ordre public).
4. Where a Contracting State requests information under this Article, the other Contracting State shall use the measures available to it to gather information for the purpose of obtaining the information requested, even if that other Contracting State may not need such information for its own tax purposes. The above obligation is limited by paragraph 3, but in no case shall such limitations be interpreted as allowing a Contracting State to refuse the exchange of information solely because of the absence of national interest in it.
5. In no case shall the provisions of paragraph 3 be interpreted as allowing a Contracting State to refuse the exchange of information solely because it is held by banks, other financial institutions or any person acting in a representative or fiduciary capacity, including designated agents, or because it relates to shares or shares in a person.’
Article 4
A new Article 28A shall be inserted after Article 28 (Exchange of information):
‘Article 28A. 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 on the enforceability and collection of its own taxes as if it were a tax claim of its own.
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 paragraphs 3 or 4, and prior to its collection and referral by the other Contracting State, the tax claim ceases to be:
(a) in the case of an application under paragraph 3, a claim 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 national law of the State referred to first, the latter may take interim measures 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 request.
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) provide assistance in cases where the administrative burden on that State is clearly disproportionate to the benefit to be obtained by the other Contracting State.’
Article 5
A new Article 28B shall be inserted after Article 28A (Assistance in collection):
‘Article 28b. Limitation of benefits.
1. Contracting States declare that their rules and procedures of domestic law with regard to abuses of the rule (including tax treaties) apply to the treatment of such abuses.
2. The benefits of this Convention shall not be deemed to be granted to a person other than the actual beneficiary of income from the other Contracting State.
3. This Convention shall not prevent Contracting States from applying their domestic rules relating to international tax transparency.
"Controlled Foreign Corporation Rules
" (CFCs).
4. The benefits derived from this Convention may not apply to a resident of a Contracting State, or in respect of a transaction carried out by that resident, where the primary purpose or one of the primary purposes for the creation, existence, establishment, registration or presence of such resident, or of the transaction carried out by him, is to obtain the benefits derived from this Convention, which would otherwise not be accessible to him.”
Article 6
A new paragraph along the following lines shall be inserted after paragraph 10 of the Protocol:
‘11. Article 28 (Exchange of information) shall be understood to allow Contracting States to use other relevant techniques in both Contracting States to obtain information such as simultaneous inspections, inspections abroad and the exchange of information by sector of activity;
(i) in accordance with the internal rules and administrative practices of each Contracting State and;
(ii) provided that the procedure has been agreed between the competent authorities of both Contracting States in accordance with Article 27(3) of the Convention.’
Article 7
A new paragraph along the following lines shall be inserted after paragraph 11 of the Protocol:
‘12. In relation to article 28A
Article 28A(4) (Assistance in collection) shall be deemed to include provisional interim relief consisting of the attachment prior to the recovery of a person's tax claim in accordance with the laws of both Contracting States.'
Article 8
A new paragraph along the following lines shall be inserted after paragraph 12 of the Protocol:
‘13. In relation to article 28B
The term “operation” referred to in Article 28B(4) (Limitation of profits) shall be understood to include the creation, assignment and disposal of shares, receivables, assets or other rights where the primary purpose or primary purpose of such creation, assignment or disposal is to obtain the benefits of this Convention.”
Article 9
1. The Governments of the Contracting States shall be notified, through diplomatic channels, that the internal procedures necessary in each of the Contracting States for the entry into force of this Amending Protocol have been complied with.
2. The amending Protocol shall enter into force two months after the receipt of the last of the notifications referred to in paragraph 1, and shall take effect:
(i) in the case of taxes withheld at source, in respect of amounts paid from the date of entry into force of this Amending Protocol;
(ii) in the case of other taxes, in respect of taxes required in tax periods beginning from the date of entry into force of this Amending Protocol;
(iii) in all other cases, from the date on which the Amending Protocol enters into force.
3. Notwithstanding the provisions of this Article, the provisions of Article 3 of this Amending Protocol shall apply in respect of any information referred to in that Article, even if the matter in question exists prior to the date of entry into force of this Amending Protocol or the date on which any of its provisions take effect.
4. Notwithstanding the provisions of this Article, the provisions of Article 4 of this Amending Protocol shall not apply in respect of tax claims due before the date of entry into force of this Amending Protocol. For tax claims declared after the entry into force of this Amending Protocol, they shall apply only where the tax claim relates to a fiscal year beginning from a date four years prior to the date of entry into force of this Amending Protocol.
Article 10
This Amending Protocol shall remain in force for the duration of the Convention.
Done in duplicate in New Delhi on 26 October 2012 in the English, Hindi and Spanish languages, the three texts being equally authentic. In the event of divergence between the texts, this will be resolved on the basis of the English text.
For the Kingdom of Spain,
For the Republic of India,
José Manuel García-Margallo,
Minister for Foreign Affairs and Cooperation
Shri Palaniappan Chidambaram,
Minister for Foreign Affairs and Cooperation
This Protocol entered into force on 29 December 2014, two months after the receipt of the last of the notifications informing both Parties of the completion of the necessary domestic procedures, as set out in its Article 9.
Madrid, July 3, 2020.– Technical Secretary General José María Muriel Palomino.