According to an update from the OECD, Spain deposited on 1 June 2022 its notification confirming the completion of its internal procedures for the entry into effect of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) for 50 of its covered agreement (tax treaties). The 50 covered agreements include Spain's tax treaties with Albania, Andorra, Australia, Austria, Barbados, Belgium, Bosnia and Herzegovina, Canada, Chile, Costa Rica, Croatia, Cyprus, Czech Republic, Egypt, Estonia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, India, Indonesia, Ireland, Israel, Kazakhstan, Latvia, Lithuania, Luxembourg, Malaysia, Malta, New Zealand, Oman, Pakistan, Panama, Poland, Portugal, Qatar, Romania, Russia, Saudi Arabia, Serbia, Singapore, Slovak Republic, Slovenia, South Korea, United Arab Emirates, United Kingdom, and Uruguay.
The notification confirming the completion of internal procedures is required because Spain has taken the reservation that for the MLI to become effective, Spain must first deposit such a notification. With the deposit of the notification, the provisions of the MLI will generally apply for most of the 50 notified covered agreements:
- with respect to taxes withheld at source on amounts paid or credited to non-residents, where the event giving rise to such taxes occurs on or after 1 January 2023; and
- with respect to all other taxes, for taxes levied with respect to taxable periods beginning on or after 1 January 2023.
For India, however, the MLI applies with respect to taxes withheld at source on amounts paid or credited to non-residents, where the event giving rise to such taxes occurs on or after the first day of the taxable period that begins on or after 1 July 2022 (i.e., 1 April 2023). In addition, certain covered agreements also need a further notification by the other Contracting States that have taken the same reservation regarding the effect of the MLI. These include the covered agreements with Indonesia, Romania, and Russia.