The DTA between the Kingdom of Spain and the Sultanate of Oman entered into force

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(September 19, 2015)

From the overview of DTAs as available on the website of the Spanish Ministry of Finance it can be concluded that the Agreement between the Kingdom of Spain and the Sultanate of Oman for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, which was signed on April 30, 2014 (Hereafter: The DTA), entered into force on September 19, 2015.

 

Based on Article 29, Paragraph 2 of the DTA (“ENTRY INTO FORCE”) the fact that the DTA entered into force on September 19, 2015 means that the provisions of the DTA shall have effect: 

  1. in respect of taxes withheld at source, for amounts paid or credited on or after September 19, 2015;

  2. in respect of other taxes, for any tax years commencing on or after September 19, 2015; and

  3. in all other cases, on or after September 19, 2015.

Below we will discuss some of the regulations included in the DTA of which we think they might interest our readers.

 

Taxes covered 

According to Article 2, Paragraph 3 of the DTA (“TAXES COVERED”) the existing taxes to which the Agreement shall apply are in particular:

a)     in the case of the Kingdom of Spain:

i)       the income tax on individuals;

ii)     the corporate income tax;

iii)    the income tax on non residents; and

iv)    the local taxes on income;

b)     in the case of the Sultanate of Oman:

i)       the income tax;

 

Paragraph 4 of Article 2 of the DTA subsequently arranges that the DTA shall apply also to any identical or substantially similar taxesthat are imposed after the date of signature of the Agreement in addition to, or in place of, the existing taxes.

 

Residency

With respect to the residency of a person other than a an individual that is a resident of both Contracting States Paragraph 3 of Article 4 (“RESIDENT”) arranges that it then it shall be deemed to be a resident only of the State in which its place of effective management is situated.

 

Permanent establishment

Paragraph 3 of Article 5 of the DTA (“PERMANENT ESTABLISHMENT”) arranges that a building site or construction or assembly or installation project constitutes a permanent establishment only if it lasts more than nine months.

 

Associated enterprises 

Paragraph 2 of Article 9 of the DTA (“ASSOCIATED ENTERPRISES”) contains a so-called appropriate adjustment clause.

 

Dividends

Paragraph 2 of Article 10 of the DTA (“DIVIDENDS”) maximizes the dividend withholding tax that a Source State is allowed to withhold over dividend distributions to:

a)     0 per cent of the gross amount of the dividends if the beneficial owner is a company (other than a partnership) which holds directly at least 20 per cent of the capital of the company paying the dividends;

b)     10 per cent of the gross amount of the dividends in all other cases.

 

Interest

Paragraph 2 of Article 11 of the DTA (“INTEREST”) maximizes the withholding tax that a Source State is allowed to withhold over interest payments to 5 per cent of the gross amount of the interest if the beneficial owner of the interest is a resident of the other Contracting State.

 

Royalties

Paragraph 2 of Article 12 of the DTA (“ROYALTIES”) maximizes the withholding tax that a Source State is allowed to withhold over royalty payments to 8 per cent of the gross amount of the royalties if the beneficial owner of the royalties is a resident of the other Contracting State.

 

Capital Gains

With respect to capital gains Paragraph 1 of Article 13 of the DTA (“CAPITAL GAINS”) arranges that gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State.

 

Paragraph 4 of Article 13 subsequently arranges that gains derived by a resident of a Contracting State from the alienation of shares or comparable interests deriving more than 50 per cent of their value directly or indirectly from immovable property situated in the other Contracting State may be taxed in that other State.

 

Other

The DTA furthermore includes an article arranging for a Mutual Agreement Procedure (Article 25 of DTA) and an article on the Exchange of Information (Article 26 of the DTA).

 

Click on the language of your choice to be forwarded to the text of the DTA as available on the website of Spanish Ministry of Finance (English or Spanish).

 

Are you looking for an other DTA? Then check our section DTAs & TIEAs, a very efficient way to locate numerous DTAs.

 

 

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