Spain - Royalty

Article 12. Royalties

1.  Royalties arising in one of the States and paid to a resident of the other State may be taxed in that other State. 

2.  However, such royalties may be taxed in the State in which they arise, and according to the law of that State, but the tax so charged shall not exceed 6 per cent of the gross amount of the royalties. 

3.  The term "royalties" as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use. industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience. 

4.  A capital sum from the sale of rights or property mentioned in paragraph 3 shall be taxable only in the State of which the alienator is a resident. 

5.  The provisions of paragraphs 1, 2 and 4 shall not apply if the recipient of the royalties or the capita] sum as meant in the preceding paragraph, being a resident of one of the States, has in the other State in which the royalties or the capita] sum arise a permanent establishment with which the right or property giving rise to the said income is effectively connected. In such a case, the provisions of Article 7 shall apply. 

6.  Royalties shall be deemed to arise in one of the State, when the payer is that State itself, a political subdivision, a local authority or a resident of that State, Where, however, the person paying the royalties, whether he is a resident of one of the States or not, has in one of the States a permanent establishment in connection with which the contract under which the royalties are paid was concluded, and such royalties are borne by such permanent establishment, then such royalties shall be deemed to arise in the State in which the permanent establishment is situated. 

7.  Where, owing to a special relationship between the payer and the recipient or between bath of them and some other person, the amount of the royalties paid, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the recipient in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In that case, the excess part of the payments shall remain taxable according to the law of each State, due regard being had to the other provisions of this Convention. 

Protocol:

VI. Ad Articles 10, 11. and 12

Notwithstanding provisions to the contrary in the national law of either State restitution of tax levied contrary to the provisions of Articles 10, 11 and 12 shall be granted if the claim concerned has been ledged with the competent authority of the State having levied the tax within a period of two years after the expiration of the calendar year in which the tax has been levied.

X. Ad Article 12

The provisions of paragraph 4 of Article 12 shall not apply if the sale of rights or property has taken place under the condition that the buyer is obliged to resell the rights or property.