Double Taxation Agreement Spain Usa 2019

2 For previous reports, see GMS Flash Alert 2019-107 (26 June 2019). Establishment The minimum threshold of a construction site or a construction or installation project for the construction of an establishment is increased from 6 to 12 months. We understand that the new DTT will facilitate access for US investors to the Spanish economy, as the Spanish tax burden would be increasingly reduced. The new agreement contains many other technical provisions aimed at improving the exchange of information and mutual assistance between the Spanish and US tax authorities in order to establish clearer rules on activity. For the taxation of companies established in Contracting States, the general dividend distribution rate is 15%. (Article 10(2.b). As mentioned above, this new mutual agreement procedure regime applies to cases submitted to States after 27 November 2019. The protocol is expected to have a considerable impact on investments between the two countries due to the reduction in taxation and increased security. As a result, many American expats living in Spain have to file two tax returns and are also exposed to the risk of double taxation.

On July 16, 2019, the U.S. Senate voted to ratify the new protocol amending the Income Tax Agreement and the existing protocol between the United States and Spain1. It makes substantial amendments to the existing Treaty, which entered into force in 1990, and aims to bring it closer to the current income tax policy of the countries concerned. The new protocol was signed in 2013 and forwarded to the Senate for approval in 2014. Since then, final approval of the new protocol has been delayed in the Senate. It would appear that the intention of this provision is to reduce the taxation of pension income in the host country for people who continue to participate in their pensions while working in the host country. However, if a person who has participated in a Spanish pension plan moves to the United States for employment purposes and is established in the United States while continuing to participate in the Spanish pension plan, that person would not benefit from an exemption from the current U.S. pension income tax under that provision, since the new protocol does not expressly exclude that provision from the scope of the savings clause. . .

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