In today´s post we inform you about the new double taxation treaties that have been signed by Spain with the United Kingdom and Cyprus, respectively, and the dates they enter into force.
While in the case of the United Kingdom, it was necessary to update the formerly existing treaty, which was dated of 1975, the Treaty signed with Cyprus is the first one related to income taxation
✔ As informed in a previous post, the role of Double taxation treaties is extremely important as they facilitate the exchange of information between the two signatory countries, provide for the taxation rights of incomes and capital gains obtained by a company or individual residing in one State but generated in the other Contracting State, at reduced rates and also establish methods to avoid double taxation
✔ The UK / Spain double tax treaty reduces double taxation in the cases of royalties, interest and certain dividends, resolves the tax treatment of residents not domiciled in the UK as well as of trusts and taxes capital gains on companies whose underlying assets are Spanish real estate.
✔ In the case of Cyprus, it is important to note that this territory is no longer qualified as a tax haven, for Spanish tax purposes, as it is excluded from the currently existing black list of countries qualified as such.
✔ The Spain / UK double tax treaty enters into force on June 12, 2014 whereas the Spanish Treaty with Cyprus entered into force on May 28, 2014.
These new treaties will certainly reinforce the economic and commercial relations between Spain and the United Kingdom and Cyprus, respectively, thus benefiting the improvement of the Spanish economy.