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New tax treaties in Spain and list of tax heavens

Questions about entering the Spanish market?

The number of double-taxation agreements in Spain expands and the list of countries classified as tax havens is shortened


To date there are 80 Double Taxation Agreements in force in Spain. For some years, the number of these agreements has been increasing significantly, and this makes international tax planning much easier. Among recent agreements, we can highlight the one existing with Panama, which came into force last July, which aims for this country to be removed from the list of countries regarded by Spanish tax authorities as tax havens.

Royal Decree 1080/1991 identifies a long list of such countries, with the exception of those countries which have subsequently signed an agreement with Spain allowing the exchange of tax information.

Other examples of countries leaving the list of tax havens are the UAE, with a Double Taxation Agreement which came into force in January 2007, and Malta, which has had an Agreement since September 2006. There are also new Agreements in force with Costa Rica (January 2011), Cuba (January 2011), Pakistan (May 2011) and Uruguay (April 2011). An agreement was also signed in June 2011 with Hong Kong, which has yet to come into force.

As for Switzerland (which is not regarded as a tax haven in Spain), in July 2011, an appendix to the current Double Taxation Agreement came into force, with the aim to allow the Swiss government to regularly share tax information with Spain.

Furthermore, in the wake of the report entitled: “Harmful Tax competition: An emerging Global Issue” by the OECD (1998), Spain has been executing a series of agreements which allow for the exchange of tax-related information with countries regarded as tax havens and known for the facilities they had been offering to money-laundering. The agreements do not seek to avoid double taxation but, rather, to allow Spanish authorities to obtain tax-relevant information on residents and non-residents in these countries.

A lot of these agreements have been entered into in recent years (this was the only way for these countries to be removed from the OECD’s “black list”) and, among those signed by Spain, we can highlight the agreements executed with Andorra (November 2010), Aruba (November 2009) and the Bahamas (July 2011).

In the forthcoming months, the agreements reached with Bermuda, the Cayman Islands and the Cook Islands, inter alia, are expected to come into force.

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