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New Tax Convention with Spain was Signed

October 17, 2018

[Revised on March 15, 2019]
Ministry of Finance

New Tax Convention with Spain was Signed

[Provisional translation]
1. On October 16 (Tue.) [October 17 (Wed.) in Japan], the Government of Japan and the Government of the Kingdom of Spain signed the Convention between Japan and the Kingdom of Spain for the Elimination of Double Taxation with respect to Taxes on Income and the Prevention of Tax Evasion and Avoidance in Madrid.

2. This Convention wholly amends the existing Convention, which entered into force in 1974, by revising the taxation on business profits, expanding the extent of reduction of taxation on investment income, introducing measures for prevention of abuse of this Convention, arbitration proceedings in mutual agreement procedures and assistance in the collection of tax claims, and reinforcing the exchange of information concerning tax matters. It is expected that, while eliminating double taxation and preventing international tax evasion and tax avoidance, this Convention promotes further mutual investments and economic exchanges between the two countries.

【Reference 1】 Next Steps
After the completion of the necessary domestic procedures in each of the two countries (in the case of Japan, approval by the Diet is necessary), each of the two countries shall send through diplomatic channels to the other country the notification confirming the completion of its internal procedures. This Convention will enter into force on the first day of the third month following the month of receipt of the latter notification and will have effect:

 (a) with respect to taxes levied on the basis of a taxable year, for taxes for any taxable years beginning on or after
   January 1 in the calendar year next following that in which this Convention enters into force; and

 (b) with respect to taxes levied not on the basis of a taxable year, for taxes levied on or after January 1 in the
   calendar year next following that in which this Convention enters into force.

 (c) The provisions concerning the exchange of information and the assistance in the collection of taxes have effect
   from the date of entry into force of this Convention without regard to the date on which the taxes are levied
   or the taxable year to which the taxes relate.

【Reference 2】 Texts and Key Points of the Convention
 ・“Convention between Japan and the Kingdom of Spain for the Elimination of Double Taxation with respect to Taxes
     on Income and the Prevention of Tax Evasion and Avoidance”(Japanese(PDF:296KB)English(PDF:70KB)
 ・Key Points of New Tax Convention with Spain