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Spain-Dominican Rep

3 July 2014

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Tax Treaty between Spain and the Dominican Republic to Enter Into Force

According to an announcement by the Spanish Ministry of Foreign Affairs on 2 July 2014, the tax treaty between Spain and the Dominican Republic will enter into force 25 July 2014. The treaty was signed 16 November 2011, and is the first of its kind between the two countries.

Taxes Covered

The treaty covers Spanish individual income tax, corporation tax, income tax on non-residents, and local income tax. It covers Dominican income tax.

Withholding Tax Rates

  • Dividends 0% if the beneficial owner is a company directly holding at least 75% of the paying company's capital, otherwise 10%
  • Interest - 10%, although an exemption applies for interest in connection with a sale on credit of any equipment, goods or services
  • Royalties - 10%

Provision of Services

Income from the provision of advisory, consultancy, technical assistance or other similar services by a resident of one Contracting State in the other State may be subject to withholding tax of up to 10%. However if such activities are connected with a permanent establishment (PE), the income will be taxed under the rules concerning PEs.

Double Taxation Relief

Spain applies the credit method for the elimination of double taxation, while the Dominican Republic generally applies the exemption method. However, the Dominican Republic applies the credit method in regard to interest, royalties, and provision of services income.

Entry into Effect

The treaty generally applies from the date of its entry into force, 25 July 2014.

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