Spain and Cape Verde have signed an agreement for the avoidance of double taxation (DTA), which is expected to enter into force three months after both parties have completed the ratification procedures. This agreement is beneficial for foreign investors in Spain from Cape Verde but also to Spanish investors who are doing business in the African island country.
One of our lawyers in Spain can give you detailed information on this treaty will influence taxation for your type of company once it enters into force.
The provisions of the DTA
The comprehensive double taxation agreement applies to all taxes on income levied by the two jurisdictions. It was drawn up according to the Organisation for Economic Co-Operation and Development (OECD) and will apply both to companies that derive income and to individuals who derive income from one or both jurisdictions.
The taxes on income to which the treaty applies include the business profits, taxes on real estate income, those on director’s salaries and pensions, taxes on maritime and air transport, dividends, royalties, etc.
The double tax treaty will help improve the economic relations and the investments between Spain and Cape Verde by allowing for a single point of taxation for income derived from one of the jurisdictions.
One of our lawyers in Spain can help you with information on how these treaties apply to the income you derive either from Spain or Cape Verde.
Spain’s DTA network
Spain has an extensive double tax treaty network, having signed these types of agreements with more than 90 countries.
The double tax treaty allows investors who derive income from both jurisdictions to offset the tax paid in one country against the corresponding tax payable in the other jurisdiction, thus benefiting from an advantageous protection from double taxation on income. Spain includes preferential withholding tax rates on dividends, royalties, and capital gains, also included in the treaty signed with Cape Verde.
For more information on the tax rates in Spain and other details for investors from Cape Verde, please do not hesitate to contact our law firm in Spain.