The double-taxation agreement between Canada and Spain has been amended to reduce withholding tax rates on dividends and interest payments, and to include standard provisions for the exchange of tax information.

The Protocol will help eliminate tax barriers to trade and investment, and will enhance economic links between Canada and Spain. It will also create new trade and investment opportunities.

Highlights of Amendments

  • The Canada-Spain Income Tax Convention was signed on November 23, 1976.
  • The opening round of negotiations for a revised tax treaty between Canada and Spain was held in April 2007 in Madrid. A second round of negotiations was held in October 2008 in Ottawa. Subsequent negotiations have resulted in the new Protocol being announced today.
  • The Protocol reduces withholding tax rates applicable on payments of dividends and interest and exempts from withholding tax certain payments of interest, and dividends paid to certain pension plans.
  • The Protocol also provides for assistance in the collection of taxes and includes provisions reflecting the Organisation for Economic Co-operation and Development standard for the exchange of tax information.
  • Canada and Spain will notify each other of the completion of their respective procedures, which are necessary for the entry into force of the Protocol.
  • The Protocol will enter into force after a period of three months following the date of receipt of the later of the notifications, and its provisions will have effect in accordance with Article 16 of the Protocol.
  • Canada has 92 tax treaties and 21 Tax Information Exchange Agreements in force, and has signed or is negotiating many more.