🇬🇧 United Kingdom — 🇪🇸 Spain

Tax Treaty / Double Tax Avoidance Agreement detail

The UK-Spain Double Taxation Convention was signed on 14 March 2013 and entered into force on 12 June 2014, replacing the 1975 convention. It aligns with modern OECD standards and is particularly relevant given substantial cross-border investment flows and the large British expatriate community in Spain. Dividends are fully exempt from withholding tax where the recipient company controls at least 10% of the paying company's voting power, a major improvement over the earlier treaty. A 10% rate applies to certain pension funds and other qualifying entities, and a 15% rate applies to other dividends. Interest and royalties are both fully exempt from withholding, facilitating debt and intellectual property arrangements across the border. The treaty follows the OECD Model closely in its permanent establishment definitions, including updated provisions for construction sites and service permanent establishments. Its exchange of information article reflects the 2012 OECD standard, enabling automatic exchange between HMRC and the Spanish Agencia Tributaria. Post-Brexit, UK residents no longer benefit from EU parent-subsidiary or interest-and-royalties directives, making this bilateral treaty the primary instrument for UK-Spain cross-border income. Spain's exit tax rules for departing residents are a domestic law matter not directly addressed by the treaty. The tie-breaking residency provision follows the standard OECD cascade. There is no saving clause as understood in the US-style—both countries operate on residence-based taxation without citizenship-based taxation. An EU-era Totalization-style social security arrangement was bilateralised post-Brexit through a separate social security agreement maintaining continuity for cross-border workers.