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Avoidance of Double Taxation Agreement with Spain



Avoidance of Double Taxation Agreement with Spain


Hong Kong and Spain do have a Double Taxation Avoidance Agreement (DTAA) in place. This agreement helps to prevent residents of both countries from being taxed twice on the same income.


Here are some key points about the DTAA:


  • Signed in 2004: The agreement was signed in December 2004 and entered into force in December 2019.

  • Benefits for Hong Kong residents:

  • Reduced withholding tax on dividends: The agreement reduces the Spanish withholding tax on dividends received by Hong Kong residents from 20% to 10%. In certain cases, the withholding tax can be reduced to 0%.

  • Tax credit for income taxed in Hong Kong: Spanish residents can claim a tax credit in Spain for income that has already been taxed in Hong Kong.

  • Benefits for Spanish residents:

  • Similar tax credit for income taxed in Spain: Hong Kong residents can claim a tax credit in Hong Kong for income that has already been taxed in Spain.

  • Reduced withholding tax on interest: The agreement reduces the Hong Kong withholding tax on interest paid to Spanish residents.


Here are some resources where you can find more information about the DTAA:



It's important to note that this is just a general overview of the DTAA. The specific provisions of the agreement may be complex and you should consult with a tax professional for advice on your individual situation.


How Bestar can Help


Bestar can help you with the avoidance of double taxation under the agreement between Spain and Hong Kong in several ways:


Understanding the Agreement:


  • Explain the DTAA: Bestar can help you understand the key provisions of the agreement, including which types of income it applies to, what tax benefits are available, and any specific requirements that need to be met.

  • Identify relevant articles: We can help you identify the specific articles in the DTAA that apply to your situation.


Claiming Tax Benefits:


  • Prepare tax filings: Bestar can assist you in preparing your tax filings in both Hong Kong and Spain, ensuring you claim all the available tax benefits under the DTAA.

  • Apply for tax credits: We can help you navigate the process of claiming tax credits for income that has already been taxed in the other country.

  • Negotiate with tax authorities: If you encounter any issues with claiming tax benefits, Bestar can assist you in communicating and negotiating with the relevant tax authorities.


Additional Services:


  • Tax planning: Bestar can help you develop tax planning strategies to minimize your overall tax burden, taking into account the provisions of the DTAA.

  • Staying updated: We can keep you informed about any changes or updates to the DTAA that may affect your tax situation.


It's important to note that:


  • Complexity of the DTAA: The DTAA can be complex, and specific situations may require in-depth analysis.


By leveraging Bestar's expertise and understanding of the DTAA, you can potentially:


  • Reduce your overall tax liability

  • Ensure compliance with tax regulations in both countries

  • Navigate the complexities of claiming tax benefits


Contact Bestar today!

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