On 8 October, the Council of Ministers authorised the signing of
a new Tax Treaty ("TT") between Spain and Germany.
The TT was published on 18 March in the Spanish Official
Congress Gazette. The following is a summary of what we believe to
be the most relevant changes:
Capital Gains (Article 13 TT): Significant
changes have been made in relation to the taxation of capital gains
from the transfer of shares and corporate quotas:
- Capital gains obtained from the transfer of shares or quotas,
or similar rights, in a company whose assets directly or indirectly
consist of at least 50% property located in a signatory State may
be subject to tax in such State.
- Accordingly, the profits obtained by Spanish companies from the
transfer of shares in German companies whose assets are directly or
indirectly comprised of at least 50% property located in Germany
will be subject to taxation in Germany, notwithstanding the
applicable exemptions existing under German law.
