Spain and Austria signed a
treaty for the avoidance of double taxation in December 1966. The treaty is applicable to natural persons and legal entities,
tax residents of both countries and it is enforced when the
tax residents of a state are performing
taxable activities in the other contracting state.
Austrian tax residents who are interested in
opening a company in Spain can benefit from the effects of the
double taxation agreement (DTA), which offers various
tax exemptions or deductions. The
treaty provides a comprehensive image on the
taxes which are applicable under the agreement and
our team of company formation agents in Spain can offer advice on the manner in which such
taxes are imposed.
Taxes under the Austria – Spain DTA
According to the stipulations of the treaty, a set of taxes are applicable to the tax residents of the two states.
Article 2 of the Convention stipulates that Austria will apply the following taxes:
• the income tax on individuals;
• corporate income tax;
• contribution for rents for the promotion of households and the compensation for family responsibilities;
• tax on administrators;
• tax on industrial and commercial exploitations, including the tax on wages;
• tax on heritage;
• the land tax;
• the tax on agricultural and forestry exploitation;
• the tax on the value of vacant lots;
• the tax on property not subjected to the tax on inheritance.
Austrian investors who are interested in
company formation in Spain should know that the
Spanish authorities will impose, amongst many other
taxes, the following:
• the general tax on the income on rents obtained by natural persons;
• the general tax on the income on rents obtained by companies and other legal entities.
Permanent establishment in Spain
According to the stipulations of Article 5, a
permanent establishment in Spain is considered to be a fixed place in which the
company carries out its commercial activities. Such
companies can carry through the permanent establishments all their commercial activities or a part of their objects of activity. Foreign investors interested in
company registration in Spain should know that a
permanent establishment designates an office, a
branch office, building sites in which the operations are carried out on a continuous basis for at least twelve months, as well as mines and other types of
establishments.