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International Tax Planning

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Do you have tax obligations in several countries?

If you have tax obligations in more than one country, e.g. you have a property in your home country but are tax resident in Spain, you may be interested in double taxation treaties.

What are double taxation treaties?

The conventions for the purpose of avoiding international double taxation of income and wealth and preventing tax evasion are international treaties that regulate tax between two countries, distributing taxation power between them, with the aim of eliminating international double taxation, preventing tax evasion, guaranteeing legal certainty for taxpayers and States, and ensuring uniform application of tax legislation in both.

The main purpose is to avoid a natural or legal person being taxed in two different countries for the same concept (e.g. personal income tax) or an asset being taxed for the same concept in two different countries. Thanks to these conventions, taxation is regulated between the different countries in such a way that individuals and companies only pay tax once.

Article 80 of the LIRPF provides as follows:

Article 80. Deduction for international double taxation.

  1. When the taxpayer’s income includes income or capital gains obtained and taxed abroad, the smallest of the following amounts shall be deducted:

a) The effective amount of what has been paid abroad by reason of a tax of an identical or analogous nature to this tax or to non-resident income tax on said income or capital gains.

b) The result of applying the average effective tax rate to the part of the taxable base taxed abroad.

How many double taxation treaties has Spain signed?

In Spain, double taxation treaties are managed by the Ministry of Foreign Affairs. Spain has currently signed double taxation treaties with more than 90 countries around the world.

You can view the complete list by clicking on the following link

Are you interested in a specific case study?

Our International Tax Planning service is a service that applies worldwide regardless of the nationality or origin of the clients. The most common situation is usually between Spain and another foreign country, but there is also the possibility of it being between two foreign countries. The service will mainly consist of analysing the specific case presented by the client and reducing the tax cost through the double taxation agreements signed between the countries involved.

For more information, please do not hesitate to contact our multidisciplinary professional firm specialised in international taxation. At Pellicer & Heredia we can analyse your tax situation on a personalised basis, as well as carry out a tax planning study in accordance with your needs.

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