AmChamSpain is pleased to share that the US Senate has ratified the protocol amending the tax treaty between the United States and Spain. The protocol will enter into force on November 27th, 2019.
Throughout the past 10 years, AmChamSpain has promoted the modernization and modification of a new protocol. For this reason, we have created within our Fiscal Committee, a Task Force with experts in international taxation from the following different law firms; Baker & Mckenzie, Cuatrecasas, Deloitte, Ernst & Young, Garrigues, KPMG, PriceWaterhouseCoopers and Uría Menéndez, all of which are currently members of the Chamber. Notably, we urged Governments to modify the articles of the protocol that affected the treatment of capital gains, dividends, fees and interests.
The tax treaty that was in force prior to the modification, was of the year 1990, and it was based on different economic and commercial necessities than those of today. Therefore, that is why the US and Spanish governments have decided to modify the protocol in a way that it suits the current economic and commercial reality. The introduction of measures to avoid double taxation and preventing tax evasion will boost the Spanish economy by stimulating bilateral investment. The new protocol will provide security and certainty when conducting business in both Spain and the United States and promote fair and free trade.
In relation to the modifications of the protocol, some of the changes that have been made are the following; incorporation of arbitration procedures and new conciliation mechanisms, an extension of the minimum time to consider a permanent establishment, and both the withholding tax on interest for banks and the withholding of royalties have been eliminated.
Our President, Jaime Malet, has declared that the new protocol, “will benefit Spain as an investing destination for US companies in comparison to other European countries that until now have had better agreements, and therefore this will boost the Spanish companies whose subsidiaries compete with other foreign parent companies with a fiscal framework which was until now more favorable in the US ”.
On that account, we have organized an informational forum in relation to the new protocol which will take place at the Instituto Estudios Fiscales in Madrid on October 29th. This event will involve the participation of the representatives of the firms that take part in TaskForce of our Fiscal Committee.
For more information about the event: http://bit.ly/2MABfc4