Ireland and
Spain have concluded a
treaty for the avoidance of double taxation and the
prevention of tax evasion. The
double taxation agreement (DTA) is applicable to
income and capital gains, and it is available for both natural persons and legal entities performing
taxable activities in one of the two countries. The
treaty is mutually applicable for the
Irish and
Spanish citizens,
tax residents of the two contracting states.
Our team of Irish company formation representatives can provide more details on the
provisions of the treaty and ways in which they are imposed.
Taxes under the Irish- Spanish DTA
As mentioned above, the treaty is available for income and capital gains, as well as for the gains obtained from movable or immovable property. According to the stipulations of the treaty, the two countries are imposing similar taxes, but there may appear differences which arise from the legislations of each jurisdiction.
Irish tax residents will be taxed in Spain for the following taxes:
• the income tax on individuals;
• the corporate tax.
• the income tax;
• the capital gains tax.
Being a tax resident of one of the two contracting state refers to the fact that the respective state can impose a tax based on the following:
• domicile;
• residence;
• place of management;
• other similar situations.
The taxation of the business profits explained by our Irish company formation experts
As a general rule, the
business profits of a company are always taxed in the country in which the respective business carries its operations. If the company has an office or other establishment in the other country, which is considered a
permanent establishment, the
business profits will be taxed in the other country. That is, a
Spanish company operating in
Ireland through a
permanent establishment will be
taxed in Ireland, but it is important to know that the
company will be imposed with the above mentioned
taxes only in respect to the
business profits obtained in Ireland.