martes, 5 de junio de 2012

Spain and United States finalise new agreement to avoid double taxation


The announcement was made on Monday morning at the opening ceremony for a seminar on investment taxation between the two countries organised by the Spanish Confederation of Business Organisations (Spanish acronym: CEOE) at its headquarters in collaboration with the economic affairs team.


Miguel Ferre revealed that, following two years of intense negotiations, the new protocol between the Kingdom of Spain and the United States of America was finalised on 25 May. This new agreement will amend the existing agreement, which dates back to February 1990, in order to avoid double taxation and prevent income tax evasion.

"The importance of this document for both countries goes without saying as we are all aware of the strong economic and investment ties that exist between the two countries", said Miguel Ferre at the opening ceremony of the seminar.

The new protocol will update certain sections of the agreement to adapt it to both the needs arising from current economic and trade relations between Spain and the United States and to the various changes that have been made to the OECD Model Convention on the avoidance of double taxation.

In his speech, Miguel Ferre said that the protocol, which amends up to fourteen sections, will encourage Spanish investment in the United States and US investment in Spain. "I am convinced that the signing of this new agreement will provide definitive backing for American investment in Spain and that our companies will make a firm commitment to growing their business in the United States", he said.

More agreements

With this agreement, Spain has taken another step in its commitment to renegotiate all those agreements that, with the passing of time and the close economic relations Spain has with certain countries, need to be adapted to new circumstances. The aim is not to discriminate against investments made abroad in favour of investments that can be made within a certain country.

Miguel Ferre said that this "fiscal neutrality" target is fundamental for avoiding tax imbalances that impede growth and the internationalisation of companies.

Moreover, Miguel Ferre highlighted that these agreement will foster the creation of a "framework of legal certainty" that foreign investors can use after "clearly defining the rules of the game". This is absolutely essential when discussing investments in excess of a million euros.

FATCA

The State Secretary also highlighted the FATCA Project in which Spain is involved alongside other important players such as the United States, Germany, France, the United Kingdom and Italy.

This project will come into force within a few months and will provide information on the ownership of the banking assets of the financial entities in these countries that it has been possible to keep hidden until now. This will significantly help the tax authorities liquidate these assets.

"Spain is permanently talking with the United States about examining how to integrate the spirit of the FATCA Project into our domestic legislation while fully respecting the framework of EU legislation", added Miguel Ferre. In his opinion, this project "demonstrates the interest of the US in terms of exchanging tax information and thus provides an important stimulus to the development of such transparency at an international level".

As well as the FATCA Project, Miguel Ferre also emphasised how the EU is trying to enhance the application of the savings directive through an amendment proposal that will enable more information to be exchanged between the Member States of the European Union. All these initiatives are aimed at achieving the common goal of generating greater transparency to reduce tax evasion and foster increased international trade and investment.

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