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Spain – China Double Taxation Treaty

Spain – China Double Taxation Treaty

Chinese businessmen who want to know what types of benefits they can have when entering the Spanish market should know that they can also rely on the provisions of the treaty for the avoidance of double taxation signed by Spain and China. The double taxation treaty (DTA) stipulates the ways in which income taxes are imposed to tax residents of the two contracting states. Such taxes are applicable to natural persons, as well as to legal entities operating on these markets. Our team of Spanish company formation representatives can provide extensive information on the main benefits the Chinese businessmen can have if they opt to open a company in Spain

Income taxes under the Spain- China DTA

When establishing a business presence on the Spanish market, investors will be taxed on income and on capital, as well as on parts of income or elements of capital.

At the moment, Spain applies the following income taxes, under this treaty

  • the income tax on individuals;
  • the corporate tax;
  • the capital tax;
  • local taxes on capital and on income.

According to the stipulations of the treaty, the countries are applying the same or similar income taxes, included in the agreement in accordance with the local legislation. 

The Chinese authorities impose the next taxes:

  • the individual income tax;
  • the income tax which refers to joint ventures;
  • income tax on foreign enterprises;
  • the local income tax. 

These taxes are applicable to the national territory of each country or to other geographical locations in which these countries have sovereignty; our team of Spanish company incorporation agents can offer more details on this issue. 

The meaning of residency under the Spain- China DTA 

Article 4 of the agreement stipulates that a resident of a contracting state represents any type of person who is liable to income taxes under the rules of regulations of that particular state. Such taxes can refer to his or her domicile, residence, the place of management or company headquarters. 

In the situation in which the person is a resident of both countries (in this case, China and Spain), he/she will be taxed in the state in which the individual has more relations, which can refer to personal or business matters. 

Persons who need further information on the Spain-China double taxation treaty can address to our team of Spanish company incorporation consultants, who can offer their expertize on this matter.