Decree of the Minister for Foreign Affairs No 23 / 1982 Coll.
Decree of the Minister for Foreign Affairs on the Treaty between the Czechoslovak Socialist Republic and Spain on the avoidance of double taxation and the prevention of tax evasion in the field of income and property taxes
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Effective from 05.06.1981
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23
DECLARATION
Minister for Foreign Affairs
of 10 December 1981
on the Treaty between the Czechoslovak Socialist Republic and Spain on the avoidance of double taxation and the prevention of tax evasion in the field of income and property taxes
On 8 May 1980, the Treaty between the Czechoslovak Socialist Republic and Spain on the avoidance of double taxation and the prevention of tax evasion in the field of income and property taxes was signed in Madrid.
The Treaty was approved by the Federal Assembly of the Czechoslovak Socialist Republic and ratified by the President of the Republic. The instruments of ratification were exchanged in Prague on 5 June 1981.
Pursuant to Article 28 of the Treaty, the Treaty entered into force on 5 June 1981.
The Czech version of the Treaty is hereby published at the same time.
First Deputy:
Ing. Book v. r.
TREATY
between the Czechoslovak Socialist Republic and Spain on avoiding double taxation and preventing tax evasion in the field of income and property taxes
the Czechoslovak Socialist Republic and Spain,
awareness of the need to facilitate trade and promote economic cooperation in accordance with the Final Act of the Conference on Security and Cooperation in Europe,
decide to conclude a double taxation agreement and prevent tax evasion in the field of income and property taxes. To this end, they have agreed as follows:
Persons covered by the contract
This Treaty shall apply to persons residing or having their registered office in one or both Contracting States.
Taxes covered by the contract
1. This Agreement shall apply to income and property taxes collected for the benefit of each Contracting State, whatever the method of collection.
2. All taxes levied on the total income, on all or parts of the income or assets, including taxes on profits arising from the disposal of movable or immovable property, taxes on the total amount of wages paid by undertakings and taxes on the increase in value shall be treated as income and property taxes.
3. The current taxes covered by the contract are in particular:
(a) in Czechoslovakia:
(i) profit payment and profit tax;
(ii) payroll tax;
(iii) income tax on literary and artistic activities;
(iv) agricultural tax;
(v) population income tax;
(vi) domestic tax; and
(vii) capital contribution (hereinafter referred to as "Czechoslovak tax");
(b) in Spain:
(i) income tax on natural persons;
(ii) corporate tax;
(iii) property tax
(hereinafter referred to as "Spanish tax ').
4. The contract will also apply to all identical or substantially similar taxes which will be imposed upon signature of the contract in addition to or in place of current taxes. The competent authorities of the Contracting States shall notify each other of any significant changes to be made to their respective tax laws.
General definitions
1. In this Treaty, unless the link requires a different interpretation:
(a) The term "Spain" refers to the Spanish State and covers any area beyond the territorial waters of Spain which has been or may be designated, in accordance with international law, in accordance with the laws of Spain on the mainland, as an area over which Spain's rights on the seabed and its underground and its natural resources may be exercised.
b) The term "Czechoslovakia" refers to the Czechoslovak Socialist Republic.
(c) The terms "one Contracting State" and "the other Contracting State" refer to Czechoslovakia and Spain according to the context.
(d) The term "person" includes natural persons, companies and any other association of persons.
(e) The term "company" shall refer to any legal person or substance considered to be a legal entity for tax purposes.
(f) The terms "undertaking of one Contracting State" and "undertaking of the other Contracting State" shall refer to an undertaking operated by a person resident or domiciled in one Contracting State or, where appropriate, an undertaking operated by a person domiciled or domiciled in the other Contracting State.
(g) The term "member" shall mean:
(i) any natural person who is a national citizen of a Contracting State;
(ii) any legal person, personal company and association established under the law in force in a Contracting State.
(h) The term "international transport" shall mean any transport carried out by a ship or aircraft operated by an undertaking the actual management of which is located in a Contracting State where the ship or aircraft is not used only between places situated in the other Contracting State.
(i) The term "competent authority" shall mean:
(i) in the case of Czechoslovakia, the Minister of Finance of the Czechoslovak Socialist Republic or his authorised representative;
(ii) in the case of Spain, the Minister of Finance or any other office entrusted by the Minister.
2. Any expression which is not defined in the contract shall have meaning for its application by the contracting State, which shall belong to it under the law of that contracting State governing the taxes which are the subject of the contract, unless the link requires a different interpretation.
Tax domicile
1. For the purposes of this Treaty, the term "resident or registered in a Contracting State 'shall mean any person who, under the law of that State, is subject to taxation in that State by reason of his residence, residence, place of administration or any other similar criterion. However, this term does not include persons who are subject to taxation in that State only on income which they receive from sources in that State located or from assets which they own in that State.
2. Where, pursuant to paragraph 1, a natural person resides in both Contracting States, the case shall be decided in accordance with the following rules:
(a) It is assumed that that person is resident in the Contracting State in which he has a permanent residence. If it has a permanent residence in both Contracting States, it is assumed to reside in the Contracting State with which its personal and economic ties are the narrowest (centre of life interests).
(b) If the Contracting State in which the person has a centre of his life interests cannot be designated, or if he does not have a permanent residence in any Contracting State, he shall be presumed to reside in the Contracting State in which he normally resides.
(c) If the person normally resides in the two Contracting States or if he normally does not reside in any of them, he shall be presumed to reside in the Contracting State of which he is a national.
(d) Where that person is a member of both Contracting States or is not a member of any of them, the competent authorities of the Contracting States shall adjust the matter by mutual agreement.
3. Where a person other than a natural person has its registered office in both Contracting States in accordance with the provisions of paragraph 1, it shall be presumed to have its registered office in the Contracting State in which the place of its effective management is situated.
Permanent establishment
1. For the purposes of this Treaty, the term "permanent establishment" shall mean a permanent establishment for the business in which the undertaking carries out its activities in whole or in part.
2. the term "permanent establishment" includes in particular:
(a) place of management;
(b) the race;
(c) an office;
(d) the factory,
(e) workshop,
(f) mine, quarry, or other place where natural resources are extracted.
3. Construction sites or installations shall be a permanent establishment only if they last for more than 12 months.
4. the term "permanent establishment" does not cover:
(a) equipment used only for the storage, display or supply of goods to the undertaking;
(b) the supply of goods to an undertaking which is maintained only for storage, display or delivery;
(c) the supply of goods to an undertaking which is maintained only for the purpose of processing by another undertaking;
(d) permanent business equipment which is maintained only for the purpose of purchasing goods or collecting information for the undertaking;
(e) permanent business equipment which is maintained only for the purpose of advertising, information, scientific research or similar activities for an undertaking having a preparatory or auxiliary character.
5. A person acting in one Contracting State as an undertaking of the other Contracting State - other than a representative having an independent status as referred to in paragraph 5 - shall be deemed to be a permanent establishment in the first State if he is equipped in that State with the full power normally exercised there and allowing him to conclude contracts on behalf of an undertaking, unless the activity of that person is limited to the activities referred to in paragraph 4.
6. In the other Contracting State, the mere fact that an undertaking in that other State carries out its business through a broker, a general agent or any other representative having an independent position shall not be regarded as a permanent establishment of an undertaking of one Contracting State where such persons act in the proper framework of their business.
7. The fact that a company which has its registered office in one Contracting State controls a company or is controlled by a company which has its registered office in the other Contracting State or which carries out its business in that other State (whether through a permanent establishment or otherwise) does not in itself make it a permanent establishment of any other company.
Revenue from immovable property
1. Revenue from immovable property, including income from agricultural or forestry holdings, may be taxed in the Contracting State in which such property is located.
2. (a) Subject to paragraphs (b) and (c), the term "immovable property" shall be defined in accordance with the law of the Contracting State in which such property is located.
(b) The term "immovable property" shall in any case include accessories for immovable property, a live and dead inventory of agricultural and forestry holdings, rights to which the provisions of civil law applicable to immovable property, the consumption of immovable property and the right to variable or fixed salaries for mining or the right to mine mineral deposits, springs and other natural resources apply.
(c) Ships and aircraft shall not be regarded as immovable property.
3. The provisions of paragraph 1 shall apply to revenue from direct use, rental and any other use of immovable property.
4. The provisions of paragraphs 1 and 3 shall also apply to income from the immovable property of an undertaking and to income from immovable property used for the exercise of a professional profession.
Profits of enterprises
1. The profits of an undertaking of one Contracting State shall be subject to taxation only in that State if the undertaking does not carry out its business in the other Contracting State through a permanent establishment located there. Where an undertaking carries out its activities in this way, the profits of the undertaking may be taxed in that other State, but only to the extent that they can be attributed to that permanent establishment.
2. Where an undertaking of a Contracting State carries out its activities in the other Contracting State through a permanent establishment situated there, it shall be attributed in each Contracting State to that permanent establishment the profits which it would expect to achieve if, as a separate undertaking, it performed the same or similar activities under the same or similar conditions and traded completely independently with the undertaking of which it is a permanent establishment.
3. In determining the profits of a permanent establishment, it shall be permitted to deduct the costs incurred for the objectives pursued by that permanent establishment, including management expenses and general administrative expenses thus incurred, whether in the State in which that permanent establishment is located or elsewhere.
4. Where, in a Contracting State, it is customary to determine the profits to be added to a permanent establishment on the basis of the distribution of the company's total profits by different parts of it, the provisions of paragraph 2 shall not preclude that Contracting State from determining the profits to be taxed by division as usual. However, the method of distribution of profits adopted shall be such that the result is consistent with the principles set out in this Article.
5. A permanent establishment shall not make any profits on the basis that it only purchased goods for the undertaking.
(6) For the purposes of the preceding paragraphs, the profits to be attributed to a permanent establishment shall be determined each year on the basis of the same method, unless there are serious and sufficient grounds for a different procedure.
7. Where profits include revenue which is dealt with separately in other Articles of this Treaty, the provisions of those Articles shall not be affected by the provisions of this Article.
Sea and air transport
1. Profit from the operation of ships or aircraft in international transport shall be subject to taxation only in the Contracting State in which the actual management of the undertaking is located.
2. Where the actual management of a shipping undertaking is on board a ship, it shall be deemed to be located in the Contracting State in which the ship has its home port, or if the ship does not have its home port, it shall be deemed to be located in the Contracting State in which the operator of the ship is domiciled.
3. The provisions of paragraph 1 shall also apply to profits from participation in a pool, joint operation or an international operational organisation.
Associate undertakings
1.
(a) the undertaking of one Contracting State participates, directly or indirectly, in the management, control or capital of the undertaking of the other Contracting State; or
(b) the same persons are directly or indirectly involved in the management, control or capital of the undertaking of one Contracting State and of the undertaking of the other Contracting State;
and where, in one or the other cases, conditions have been negotiated or imposed between both undertakings in their commercial or financial relations, which differ from those which would have been negotiated between independent undertakings, profits which would have been achieved without such conditions may have been made by one of the undertakings, but which, in view of those conditions, have not been achieved, be incorporated into the profits of that undertaking and consequently taxed.
2. If the profits from which the undertaking of one Contracting State has been taxed in that State have also been included in the profits of the undertaking of the other Contracting State and taxed accordingly, and if the profits thus included are profits which would have been realised by the undertaking of the other Contracting State if conditions had been negotiated between the two undertakings as independent undertakings, the first State shall adjust accordingly the amount of tax levied on those profits in the first State. When establishing such arrangements, due account shall be taken of the other provisions of this Treaty in relation to the nature of the income and, if necessary, the competent authorities of the Contracting States shall consult to that end.
3. The Contracting State shall not modify the profits of the undertaking in the cases referred to in paragraph 1 if the limitation period has expired under the law of that State.
Dividends
1. Dividends paid by a company which has its registered office in one Contracting State may be taxed in that other State.
2. However, these dividends may also be taxed in the Contracting State in which the company which pays them has its registered office, under the law of that State. However, where the beneficiary is the beneficial owner of dividends, the tax thus imposed shall not exceed:
(a) 5% of the gross amount of dividends where the beneficial owner is a company (but not a personal company that does not have legal personality) which owns directly at least 25% of the capital of the dividend-paying company;
(b) 15% of the gross amount of dividends in all other cases.
3. The competent authorities of the Contracting States shall, by mutual agreement, adapt the method of application of paragraph 2.
4. Paragraph 2 shall not affect the taxation of the profits of the company on which dividends are paid.
5. The term "dividends," used in this Article, refers to income from shares, profit or loss shares, coupons or other rights, with the exception of claims, with a profit participation, as well as income from other social rights which are subject to the same taxation as income from shares under the tax law of the State in which the company paying dividends is established.
6. The provisions of paragraphs 1 and 2 shall not apply where the beneficiary of dividends residing or having his registered office in a Contracting State is engaged in an industrial or commercial activity in the second Contracting State in which the company paying dividends has its registered office, through a permanent establishment situated there, or is engaged in a free occupation in that other State by means of a permanent base situated there, and where the participation on the basis of which the dividends are paid is actually linked to such permanent establishment or permanent base. In that case, the provisions of Article 7 or Article 14 shall apply depending on the case.
7. Where a company having its registered office in one Contracting State achieves profits or income from the other Contracting State, that other State may not tax dividends paid by that company to persons residing or having their registered office in the first State or subject the company's undistributed profits to the tax on undistributed profits, even if the dividends paid or undistributed profits remain in whole or in part from profits or income obtained in that other State.
Interest
1. Interest having a source in one Contracting State and paid to a person domiciled or domiciled in the other Contracting State shall be subject to taxation only in that other State.
2. The term "interest" used in this Article shall refer to income from claims of any kind, secured or not secured by a lien on immovable property, both providing or not providing the right to participate in the debtor's profits, and in particular income from public bonds and bonds, including premiums and winnings associated with such bonds.
3. The provisions of paragraph 1 shall not apply where the recipient of interest residing or having his registered office in a Contracting State is engaged in an industrial or commercial activity in the other Contracting State in which the interest has a source, an industrial or commercial activity, through a permanent establishment situated there, or in that other State of a free profession, by means of a permanent base situated there, and where the claim on which the interest is paid is actually linked to such a permanent establishment or permanent base. In this case, the provisions of Article 7 or Article 14 shall apply depending on the case.
4. Where the amount of interest paid, in view of the claim on which it is paid, exceeds, by reason of the special relations existing between the payer and the payee or between the two and the third parties, the amount that the payer would have agreed with the payee if it had not been for such relations, the provisions of this Article shall apply only to that last amount. In this case, the part of the salary exceeding it shall remain subject to taxation under the law of each Contracting State and taking into account other provisions of this Treaty.
Licence fees
1. Licensing fees having a source in one Contracting State and paid to a person residing or having his registered office in the other Contracting State may be taxed in that other State.
2. However, such royalties may be taxed in the Contracting State in which their source is located, under the law of that State. However, the tax thus imposed shall not exceed 5% of the gross amount of royalties provided that the royalties are subject to taxation in the other Contracting State.
3. Copyright licence fees and other similar salaries for the performance or reproduction of literary, dramatic, musical or artistic works (but excluding royalties paid for cinematographic films and recorded on film or television tapes for television broadcasting), having a source in one Contracting State and paid to a person resident or established in the other Contracting State who is subject to taxation on such royalties, shall be subject to taxation only in that other State.
4. The term "licence fees' used in this Article refers to salaries of any kind paid for use or for the right to use copyright for the work of literary, artistic or scientific, including cinematographic films, patent, trade mark, model or model, plan, secret formula or procedure, or to the use or use of industrial, commercial or scientific equipment or for information relating to industrial, commercial or scientific experience.
5. The provisions of paragraphs 1, 2 and 3 shall not apply where the licensee of a licence fee residing or having his registered office in one Contracting State carries out, in the other Contracting State in which the licence fee is paid, a source, an industrial or commercial activity through a permanent establishment which is located there, or carries out a free occupation in that other State by means of a permanent basis situated there, and where the right or property for which the licence fee is paid is actually linked to such a permanent establishment or permanent base. In that case, the provisions of Article 7 or Article 14 shall apply depending on the case.
6. Licensing fees shall be presumed to have a source in one Contracting State where the payer is the latter himself, the lower administrative department or local office of that Contracting State or the person residing or having his registered office in that Contracting State. However, where a person who pays royalties, whether or not he is domiciled in a Contracting State, has a permanent establishment in a Contracting State in conjunction with which an obligation to pay royalties has arisen and that permanent establishment bears such royalties at its expense, those royalties shall be presumed to have a source in the Contracting State in which the permanent establishment is situated.
7. Where the amount of royalties paid, assessed in the light of the use, right or information for which they are paid, exceeds, as a result of the special relations existing between the payer and the payee or between the two and a third party, the amount which the payer would have agreed with the payee if it had not been for such relations, the provisions of this Article shall apply only to that last amount. In this case, part of the salaries exceeding that shall remain subject to taxation under the law of each Contracting State and taking into account other provisions of this Treaty.
Capital gains
1. Profit realised by a person resident or domiciled in one Contracting State from the disposal of immovable property referred to in Article 6 and located in the other Contracting State may be taxed in that other State.
2. Proceeds from the disposal of movable property forming part of the operating property of a permanent establishment held by an undertaking of one Contracting State in the other Contracting State or of movable property belonging to a permanent base which is owned by a person resident in one Contracting State in the other Contracting State for the pursuit of a free occupation, including profits from the disposal of such permanent establishment (alone or together with the whole undertaking) or such permanent bases, may be taxed in that other State. However, profits from the disposal of movable property referred to in Article 22 (3) shall be subject to taxation only in the Contracting State in which such movable property is subject to taxation under that Article.
(3) Profit from the disposal of assets other than those referred to in paragraphs 1 and 2 shall be subject to taxation only in the Contracting State in which the transferee resides or resides.
Independent professions
1. Revenue received by a person residing in one Contracting State for services rendered in the course of a professional or other independent activity of a similar nature shall be subject to taxation only in that State, provided that such person does not regularly have a permanent basis in the other Contracting State for the pursuit of his activities. If it has such a permanent base, income may be taxed in the other Contracting State, but only to the extent that it can be attributed to that permanent base.
2. The term "free profession" shall include the particularly independent activities of scientific, literary, artistic, educational or teaching, as well as the independent activities of doctors, lawyers, engineers, architects, dentists and accountants.
Dependent employment
1. Wages, salaries and other similar remuneration which a person residing in one Contracting State receives from employment shall be subject to taxation in that State only, subject to the provisions of Articles 16, 18 and 19, if the employment is not carried out in the other Contracting State. If there is employment there, the remuneration received from that employment may be taxed in that other State.
2. Remuneration which a person residing in one Contracting State receives from employment in the other Contracting State shall be subject to taxation in the first State only if:
(a) the consignee shall stay in the other State for one or more periods not exceeding 183 days in the calendar year concerned;
(b) the remuneration is paid by the employer or on behalf of an employer who is not domiciled in that other State; and
(c) the remuneration shall not be borne by a permanent establishment or permanent base held by an employer in that other State.
3. Remuneration from the employment carried out on board a ship or aircraft in international transport may be taxed, notwithstanding the previous provisions of this Article, in the Contracting State in which the actual management of the undertaking is located.
Tantiems
Tantiéms and similar salaries which a person residing in one Contracting State receives as a member of the Administrative or Supervisory Board or another similar body of a company having its registered office in the other Contracting State may be taxed in that other State.
Artists and athletes
1. Revenue received in public by performers such as theatre, film, radio or television artists, musicians and athletes as such from their personal activities may be taxed in the Contracting State in which such activities are carried out, irrespective of the provisions of Articles 14 and 15.
2. Where the income from a personal activity carried out by an artist or an athlete as such is not attributable to the artist or sportsman himself but to another person, such income may be taxed, irrespective of the provisions of Articles 7, 14 and 15, in the Contracting State in which the activities of an artist or athlete are carried out.
Pension
Pensions and other similar salaries paid on account of former employment to a person residing in a Contracting State shall be subject to taxation only in that State, subject to the provisions of Article 19 (1).
Public services
1. (a) Salaries other than pensions, paid by one contracting State, by a lower administrative department or by a local authority of that State to a natural person for services rendered to that State, to a lower administrative department or to an office shall be subject to taxation only in that State.
(b) However, such salaries shall be subject to taxation only in the second Contracting State where the services have been performed in that State and the natural person is resident in that State; and
(i) is a national of that State; or
(ii) has not obtained residence in that State solely for the purpose of such services.
2. (a) Any pension paid by one Contracting State, a lower administrative department or a local authority of that State or from the funds which they have established shall be subject to taxation only in that State to a natural person for the services shown to that State, a lower administrative department or an office.
(b) Such pensions shall, however, be subject to taxation in the second Contracting State only if the natural person is resident in that State and is a national of that State.
3. The provisions of Articles 15, 16 and 18 shall apply to the remuneration and pensions of services performed in conjunction with industrial and commercial activities carried out by the Contracting State, its lower administrative department or the local authority.
Study
Salaries which are paid for the cost of nutrition, education or practice by students or apprentices who reside in a Contracting State only for the purpose of their education or practice and who have, or have, their residence in the other Contracting State immediately prior to such a visit, shall not be taxed in the first Contracting State if such salaries have been shown to them from sources outside that State.
Other revenue
1. The income of a person resident or domiciled in a Contracting State not covered by the preceding Articles of this Treaty, wherever their source is, shall be subject to taxation only in that State.
2. The provisions of paragraph 1 shall not apply to income other than income from immovable property as defined in Article 6 (2) if the recipient of such income residing or having its registered office in a Contracting State carries on an industrial or commercial activity in the other Contracting State through a permanent establishment situated or engaged in an independent occupation in that other State by means of a permanent base situated there, and if the right or property for which the income is paid is actually linked to such a permanent establishment or a permanent base. In that case, the provisions of Article 7 or Article 14 shall apply depending on the case.
Property
1. Real estate within the meaning of Article 6 which is owned by a person residing or having his registered office in one Contracting State and is located in the other Contracting State may be taxed in that other State.
2. Moved property which is part of the operating property of a permanent establishment of an undertaking, or movable property belonging to a permanent base used for the exercise of a professional profession, may be taxed in the Contracting State in which the permanent establishment or permanent base is situated.
3. Ships and aircraft used in international transport and movable property for the operation of such ships and aircraft shall be subject to taxation only in the Contracting State in which the actual management of the undertaking is located.
4. All other parts of the property of a person residing in a Contracting State shall be subject to taxation only in that State.
Method of excluding double taxation
1. In Czechoslovakia double taxation is excluded as follows:
(a) Where a person resident or domiciled in Czechoslovakia receives income or own property which may be taxed in Spain under the provisions of this Treaty, Czechoslovakia shall exempt such income or property from taxation, subject to the provisions referred to in point (b) of this paragraph. However, when calculating the tax on the other income or property of that person, he may apply the rate of tax which would apply if the income or property exempted had not been tax-exempt.
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Regulation Information
| Citation | Decree of the Minister for Foreign Affairs No. 23 / 1982 Coll., on the Treaty between the Czechoslovak Socialist Republic and Spain on the avoidance of double taxation and the prevention of tax evasion in the field of income and property taxes |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 26.02.1982 |
|---|---|
| Effective from | 05.06.1981 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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