Australian investors who tak into consideration to open a company in Spain can benefit from the provisions of the double taxation treaty signed by the authorities of Spain and Australia. The agreement provides a comprehensive framework on the taxes applied by the two states, as well as on the measures related to the avoidance of tax evasion. The double taxation agreement (DTA) was signed in 1992 and it addresses to both natural persons and legal entities. Our team of company formation representatives in Spain can offer an in-depth presentation on the way in which such taxes are applied here.
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Taxes under Australia – Spain DTA
The treaty addresses to the tax residents of a contracting state who are performing taxable activities in the other contracting state.
Under this agreement, Australia applies the following taxes:
- the income tax;
- the resource rent tax.
The latter tax is applicable in the case of the offshore companies involved in petroleum exploitation activities.
In Spain, Australian tax residents will be taxed on the following:
- the income tax on individuals;
- the corporation tax.
Businessmen interested in company formation in Spain should know that the difference between the taxes imposed by the two countries is an effect of the legislation of each state, but the agreement in itself is applicable to similar taxes.
According to the provisions of the treaty, residency is established in accordance with the tax residency of the person or legal entity.
Our team of company formation agents in Spain can offer more details on the taxation system applicable here.
Permanent establishment in Spain
Australian investors who want to start the procedure of company registration in Spain must know that they will be liable to taxation if they carry their operations in this country under a permanent establishment.
According to Article 5 of the treaty, a permanent establishment refers to a place of business in which the operations of the company are fully or partly carried out.
It can designate a place of management, a branch, an office, a factory or a construction site in which the operations are carried out for more than 12 months.
We invite investors to contact our team of company formation consultants in Spain for more information on the taxation system under the Australian – Spanish DTA.