China - Spain Tax Treaty

AGREEMENT BETWEEN

THE GOVERNMENT OF THE PEOPLE’S REPUBLIC OF CHINA AND THE GOVERNMENT OF SPAIN

FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FlSCAL EVASION WITH RESPECT TO TAXES ON lNCOME AND CAPITAL

The Government of the People’s Republic of China and the Government
of Spain ;

Desiring to conclude an Agreement for the Avoidance of Double Taxation
and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital;

Have agreed as follows:

ARTICLE 1 PERSONAL SCOPE

This Agreement shall apply to persons who are residents of one or both of the Contracting States.

ARTICLE 2 TAXES COVERED

This Agreement shall apply to taxes on income and on capital imposed on behalf of a Contracting State or of its political subdivisions or local authorities, irrespective of the manner in which they are levied.
There shall be regarded as taxes on income and on capital all taxes imposed on total income, on total capital, or on elements of income or of capital, including taxes on gains from the alienation of movable or immovable property, as well as taxes on capital appreciation.
The existing taxes to which the Agreement shall apply are in particular:

(a) in Spain:

(i) the Income Tax on Individuals (el Impuesto sobre la Renta de
las Personas fisicas) ;

(ii) the Corporation Tax (el Impuesto sobre Sociedades) ;

(iii) the Capital Tax (el Impuesto sobre el Patrimonio) ;

(iv) local Taxes on Income and on Capital; (herein after referred to as “Spanish Tax” ) .

(b) in China:

(i) the individual income tax;

(ii) the income tax concerning joint ventures with Chinese and foreign investment;

(iii) the income tax concerning foreign enterprises; and

(iv) the local income tax:

(herein after referred to as “Chinese Tax” ) .

This Agreement shall also apply to any identical or
substantially similar taxes which are imposed after the date of signature of this Agreement in addition to, or in place of, the existing taxes referred to in paragraph 3. The competent authorities of the Contracting States shall notify each other of any substantial changes which have been made in their respective taxation laws within a reasonable period of time after such changes.

ARTICLE 3 GENERAL DEFINITIONS

For the purposes of this Agreement, unless the context otherwise requires:

(a) the term “Spain” means the territory of the Spanish State,
including its territorial sea, in which the Spanish laws relating to taxation
apply, and any area beyond its territorial sea within which Spain has sovereign rights of exploration for and exploitation of resources of the seabed and
its subsoil and superjacent water resources in accordance with international law;

(b) the term “China” means the People’s Republic of China; when
used in geographical sense, means all the territory of the People’s Republic
of China, including its territorial sea, in which the Chinese laws
relating to taxation apply, and any area beyond its territoral sea within which
the People’s Republic of China has sovereign rights of exploration for and exploitation of resources of the seabed and its subsoil and
superjacent water resources in accordance with international law;

(d) the term “tax” means Spanish tax or Chinese tax, as the context requires;

(e) the term “person” includes an individual, a company and any other body of persons;

(f) the term “company” means any body corporate or any entity
which is treated as a body corporate for tax purposes;

(g) the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;

(h) the term “national” means:

(i) Any individual possessing the nationality of a Contracting State;

(ii) Any legal person, partnership and association deriving its status as such from the law in force in a Contracting State;

(i) The term “international traffic” means any transport by a ship or
aircraft operated by an enterprise which has its place of effective management (i.e. head office) in a Contracting State, except when the ship or
aircraft is operated solely between places in the other Contracting State;

(j) The term “competent authority” means:

(i) In the case of Spain, the Minister of Economy and Finance or
his authorized representative;

(ii) In the case of China, the Ministry of Finance or its
authorized representative.

As regards the application of this Agreement by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State concerning the taxes to which this Agreement applies.

ARTICLE 4 RESIDENT

For the purpose of this Agreement, the term “resident of a
Contracting State” means any person who, under the law of that State, is liable to
taxation therein by reason of his domicile, residence, place of management or place of head office, or any other criterion of a similar nature.
Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined in
accordance with the following rules:

(a) He shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him. If he has a permanent home available to him in both Contracting States, he shall be deemed to
be a resident of the Contracting State with which his personal and economic relations are closer (centre of vital interests) ;

(b) If the Contracting State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode;

(c) If he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national;

(d) If he is a national of both Contracting States or of neither
of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.

Where by reason of the provisions of paragraph 1 a person
other than an individual is a resident of both Contracting States, then it shall
be deemed to be a resident of the Contracting State in which the place of effetive management (i.e. head office) is situated. Should any problem arise regarding this matter,
the competent authorities of the Contracting States shall settle the question by mutual agreement.

ARTICLE 5 PERMANENT ESTABLISHMENT

For the purposes of this Agreement, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on.
The term “permanent establishment” includes especially:

(a) a place of management;

(b) a branch;

(d) a factory;

(e) a workshop; and

(f) a mine, an oil or gas well, a quarry or any other place of
extraction of natural resources.

The term “permanent establishment” likewise encompasses:

(a) a building site, a construction, assembly or installation
project or supervisory activities in connection therewith, but only where such
site, project or activities continue for a period of more than six months;

(b) the furnishing of services, including consultancy services,
by an enterprise of a Contracting State through employees or other engaged personnel in the other Contracting State, provided that such activities continue for the same project or a connected project for a period or periods aggregating more than six months within any twelve-month period.

Notwithstanding the preceding provisions of this Article, the
term “permanent establishment” shall be deemed not to include:

(a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise or of collecting information, for the enterprise;

(e) the maintenance of a fixed place of business solely for the
purpose of carrying on, for the enterprise, any other activity of a preparatory
or auxiliary character;

(f) the maintenance of a fixed place of business solely for any combination of activities mentioned in sub-paragraphs (a) to (e), provided that
the overall activity of the fixed place of business resulting from
this combination is of a preparatory or auxiliary character.

Notwithstanding the provisions of paragraphs 1 and 2, where a
person—other than an agent of an independent status to whom the provisions of
paragraph 6 apply—is acting in a Contracting State on behalf of an enterprise of the other Contracting State and has, and habitually exercises, an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in the first-mentioned Contracting State in respect of
any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised
through a fixed place of business, would not make this fixed place of
business a permanent establishment under the provisions of that paragraph.
An enterprise of a Contracting State shall not be deemed to
have a permanent establishment in the other Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. However, when the activities of such an agent are devoted wholly or almost wholly on behalf of that enterprise, if the transactions between the enterprise and the agent were not made under arm’s length conditions, he will not be considered an agent of independent status within the meaning of this paragraph.
The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

ARTICLE 6

INCOME FROM IMMOVABLE PROPERTY

Income derived by a resident of a Contracting State from
immovable property situated in the other Contracting State may be taxed in that other Contracting State.
The term “immovable property” shall have the meaning which it has
under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property,
livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and
rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources. Ships and aircraft shall not be regarded as immovable property.
The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property.
The provisions of paragraphs 1 and 3 shall also apply to the
income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.

ARTICLE 7 BUSINESS PROFITS

The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on
business as aforesaid, the profits of the enterprise may be taxed in the other
State but only so much of them as is attributable to that permanent establishment.
Subject to the provisions of paragraph 3, where an enterprise
of a Contracting State carries on business in the other Contracting State
through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar
activities under the same or similar conditions and dealing wholly independently with the
enterprise of which it is a permanent establishment.
In derermining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the
business of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment
is situated or

elsewhere. However, no such deduction shall be allowed in respect of amounts, if any, paid (otherwise than towards reimbursement of actual expenses) by the
permanent establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission for specific services performed or for
management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the permanent establishment. Likewise, no account shall be taken, in the determination of the profits of a permanent establishment, for amounts charged
(otherwise than towards reimbursement of actual expenses), by the permanent
establishment to the head office of the enterprise or any of its other offices, by way of royalties, fees or other similar payments in return for the use of patents or other rights, or by way of commission for specific services performed or for management, or, except in the case of a banking enterprise, by way of interest on moneys lent to the head office of the enterprise or any of its other offices.

Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an
apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be
taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article.
No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.
For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.
Where profits include items of income which are dealt with separately in other Articles of this Agreement, then the provisions of those Articles shall not be affected by the provisions of this Article.

ARTICLE 8

SHIPPING AND AIR TRANSPORT

Profits from the operation of ships or aircraft in international traffic shall be taxable only in the Contracting State in which the place of effective management (i.e. head office) of the enterprise is situated.
f the place of effective management (i.e. head office) of a shipping enterprise is aboard a ship, then it shall be deemed to be situated in the Contracting State in which

the home harbour of the ship is situated, or, if there is no such home harbour, in the Contracting State of which the operator of the ship is a resident.

The provisions of paragraph 1 shall also apply to profits from the participation in a pool, a joint business or an international operating agency.

ARTICLE 9 ASSOCIATED ENTERPRISES

Where

(a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other
Contracting State, or

(b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of enterprises, but, by reason of
those conditions have not so accrued, may be included in the profits of
that enterprise and taxed accordingly.

ARTICLE 10 DIVIDENDS

Dividends paid by a company which is a resident of a
Contracting State to a resident of the other Contracting State may be taxed in that other State.
However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed 10 per cent of the gross amount of the dividends.

The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of these limitations.

The provisions of this paragraph shall not affect the taxation of
the company in respect of the profits out of which the dividends are paid.

The term “dividends” as used in this article means income from shares or other rights, not being debt-claims, participating in profits, as well as
income from other corporate rights which is subjected to the same taxation treatment as income from shares by the laws of the State of which the company making the
distribution is a resident.
The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on
business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with
such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.
Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State, that other State may not impose any tax on the dividends paid by the company, except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent
establishment or a fixed base situated in that other State, nor subject the company’s
undistributed profits to a tax on the company’s undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State.

ARTICLE 11 INTEREST

Interest  arising  in  a  Contracting  State  and  paid  to  a  resident

of the other Contracting State may be taxed in that other State.

However, such interest may also be taxed in the Contracting
State in which it arises and according to the laws of that State, but if the
recipient is the beneficial owner of the interest the tax so charged shall not exceed 10 per
cent of the gross amount of the interest.

The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation.

The term “interest” as used in this Article means income from
debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s profits, and in particular, income
from government securities and income from bonds or debentures, including premiums and prizes

attaching to such securities, bonds or debentures. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article.

The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on
business in the other Contracting State in which the interest arises, through a permanent
establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed
base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.
Interest shall be deemed to arise in a Contracting 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 interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed
base in connection with which the indebtedness on which the interest is paid
was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in that State in which the permanent establishment or fixed base is situated.
Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of
the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the
last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

ARTICLE 12 ROYALTIES

Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.
However, such royalties may be taxed in the Contracting State in which they arise, and according to the law of that State, but if the recipient is the beneficial owner of the royalties the tax so charged shall not exceed 10 per cent of the gross amount of the royalties.

The competent authorities of the Contracting States shall by mutual
agreement settle the mode of application of this limitation.

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 cinematographic films and films or tapes
for radio or television broadcasting, 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.
The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on
business in the other Contracting State in which the royalties arise, through a permanent
establishment situated therein, or performs in that other Contracting State
independent personal services from a fixed base situated therein, and the right or
property in respect of which the royalties are paid is effectively connected with
such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.
Royalties shall be deemed to arise in a Contracting State when the payer is that Contracting State, a political subdivision, a local authority thereof or a resident of that Contracting State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State
a permanent establishment or a fixed base in connection with which the liability
to pay the royalties was incured, and such royalties are borne by such permanent establishment or fixed base, then such royalties shall be deemed to arise in the Contracting State in which the permanent establishment or fixed base is situated.
Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, 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 beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments
shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Agreement.

ARTICLE 13 CAPITAL GAINS

Gains  derived  by  a  resident  of  a  Contracting  State  from  the

alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other Contracting State.

Gains from the alienation of movable property forming part of
the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other
Contracting State for the purpose of performing independent personal services, including such gains
from the alienation of such a permanent establishment (alone or together with
the whole enterprise) or of such fixed base, may be taxed in that other Contracting State.
Gains from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft shall be taxable only in the Contracting State in which the place of effective management (i. e. head office) of the enterprise is situated.
Gains from the alienation of shares of the capital stock of a company the property of which consists directly or indirectly principally of immovable property situated in a Contracting State may be taxed in that Contracting State.
Gains from the alienation of shares other than those mentioned
in paragraph 4 representing a participation of 25 per cent at least in a company which is a resident of a Contracting State may be taxed in that Contracting State.
Gains derived by a resident of a Contracting State from the
alienation of any property other than that referred to in paragraphs 1 to 5 and
arising in the other Contracting State may be taxed in that other Contracting State.

ARTICLE 14 INDEPENDENT PERSONAL SERVICES

Income derived by a resident of a Contracting State in respect
of professional services or other activities of an independent character shall be taxable
only in that Contracting State except in one of the following circumstances. when
such income may also be taxed in the other Contracting State:

(a) if he has a fixed base regularly available to him in the other
Contracting State for the purpose of performing his activities; in that case,
only so much of the income as is attributable to that fixed base may be taxed in that other Contracting State;

(b) if his stay in the other Contracting State is for a period or periods exceeding in the aggregate 183 days in the calendar year concerned; in that case, only so much of the income as is derived from his activities performed in that other Contracting State may be taxed in that other Contracting State.

The  term  “professional  services”   includes  especially  independent

scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

ARTICLE 15 DEPENDENT PERSONAL SERVICES

Subject to the provisions of Articles 16, 18, 19, 20 and 21,
salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that Contracting State unless the employment is exercised in the other Contracting State. If the employment is so
exercised, such remuneration as is derived therefrom may be taxed in that other Contracting State.

Notwithstanding  the  provisions  of  paragraph  1,  remuneration

derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:

(a) the recipient is present in the other Contracting State for a
period or periods not exceeding in the aggregate 183 days in the calendar year concerned; and

(b) the remuneration is paid by, or on behalf of, an employer who
is not a resident of the other State; and

(c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.

Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic, may be taxed in the Contracting State in which the place
of effective management (i. e. head office) of the enterprise is situated.

ARTICLE 16 DIRECTORS' FEES

Directors’fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State.

ARTICLE 17 ARTISTES AND ATHLETES

Notwithstanding the provisions of Articles 14 and 15, income
derived by a resident of a Contracting State as an entertainer, such as a
theatre, motion picture, radio or television artiste, or a musician, or as an athlete, from his personal activities as such exercised in the other Contracting State, may be taxed in that other State.
Where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such accrues not to the entertainer or athlete, himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of
the entertainer or athlete are exercised.
Notwithstanding the provisions of paragraphs 1 and 2 of this
Article, income derived from such activities as are referred to in paragraph 1
performed under a cultural agreement or arrangement between the Contracting States shall
be exempt from tax in the Contracting State in which the activities are exercised if the visit to that State is wholly or substantially supported by public or government funds of either Contracting State.

ARTICLE 18 PENSIONS

Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State in
consideration of past employment shall be taxable only in that State.

ARTICLE 19 GOVERNMENT SERVICE

(a) Remuneration, other than a pension, paid by a Contracting
State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or political subdivision or local authority thereof shall be taxable only in that State.

(b) However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual
is a resident of that State who:

(i) is a national of that State; or

(ii) did not become a resident of that State solely for the
purpose of rendering the services.

(a) Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or political subdivision or local authority shall be taxable only in that State.

(b) However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.

The provisions of Articles 15, 16, 17 and 18 shall apply to
remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof.

ARTICLE 20 TEACHERS AND RESEARCHERS

Remuneration which an individual who is or was immediately before
visiting a Contracting State a resident of the other Contracting State, and who is present in the first-mentioned State solely for the purpose of teaching, giving lectures or engaging in research in a school, institute, university, or any other educational
or research institution officially recognized by the Government of that State,
receives for such services shall be exempt from tax in that State for a period not
exceeding, in total three years, as from the date of his or her arrival in that State.
The provisions of paragraph 1 shall not apply to income from
research, if this research is not in the public interest but primarily for the private benefit of a certain person or persons.

ARTICLE 21 STUDENTS,APPRENTICES AND TRAINEES

A student, business apprentice or trainee who is or was
immediately before visiting a Contracting State a resident of the other Contracting
State and who is present in the first-mentioned state solely for the purpose of his education or training shall be exempt from tax in that Contracting State on:

(a) payments received from abroad for the purpose of his maintenance, education or training;

(b) scholarships, grants, allowances, and awards from governmental, scientific, literary or educational organizations for the purposes of his maintenance, education or training.

In respect of remuneration from employment, a student, business
apprentice or trainee described in paragraph 1 shall be entitled during such education or training to the same exemptions, reliefs or reductions in respect of taxes available to residents of the State which he is visiting.

ARTICLE 22 OTHER INCOME

Items of income derived by a resident of a Contracting State not dealt with in the foregoing Articles of this Agreement and arising in the other Contracting State may be taxed in that other Contracting State.
Items of income derived by a resident of a Contracting State
and arising from sources situated outside the other Contracting State shall be taxable
only in the first-mentioned Contracting State.
The provisions of paragraph 1 shall not apply to income, other than income from immovable property as defined in paragraph 2 of Article 6, if the
recipient of such income, being a resident of a Contracting State, carries on business
in the other Contracting State through a permanent establishment situated therein, or performs in that other Contracting State independent personal services from a fixed base situated therein, and the right or property in respect of which the income is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply.

ARTICLE 23 CAPITAL

Capital represented by immovable property referred to in Article 6, owned by a resident of a Contracting State and situated in the other Contracting
State, may be taxed in that other State.
Capital represented by movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or by movable property pertaining to a fixed base used for the performance of professional services, may be taxed in the Contracting State in which the permanent establishment or fixed base is situated.
Capital represented by ships and aircraft operated in international
traffic and by movable property pertaining to the operation of such ships and aircraft, shall be taxable only in the Contracting State in which the place of effective management (i.

e. head office) of the enterprise is situated.

All other elements of capital of a resident of a Contracting
State shall be taxable only in that State.

ARTICLE 24

METHODS FOR ELIMINATION OF DOUBLE TAXATION

In Spain, double taxation will be avoided in the following manner:

(a) Where a resident of Spain derives income and owns capital
which, in accordance with the provisions of this Agreement may be taxed in China, Spain shall, subject to the provisions of sub-paragraphs (b), (c) and (d), exempt such income and capital from tax.

(b) Where a resident of Spain derives items of income which, in accordance with the provisions of Articles 10, 11, 12, 16, 17 and 22, may be taxed in China, Spain shall allow as a deduction from the tax on the income of that person an amount equal to the tax paid in China. Such deduction shall not, however, exceed that part of the income tax, which is attributable, to the income which may be taxed in China.

(c) For the purposes of sub-paragraph (b) and in respect of the
items of income referred to in Articles 10, 11 and 12, the amount of Chinese tax levied shall be deemed to be equal to 15 per cent of the gross dividends, 10 per cent of the gross interest, and 15 per cent of the gross royalties.

(d) Where in accordance with any provisions of the Agreement, income derived or capital owned by a resident of Spain is exempt from tax
in Spain, Spain may nevertheless, in calculating the amount of tax on
the remaining income or capital of such resident, take into account the exempted income or capital.

In China, double taxation shall be eliminated as follows:

(a) Where a resident of China derives income from Spain, the amount of tax on that income payable in Spain in accordance with the provisions of this Agreement, may be credited against the Chinese tax imposed on that resident. The amount of credit, however, shall not exceed the amount of the Chinese tax on that income computed in accordance with the taxation laws and regulations of China.

(b) Where the income derived from Spain is a dividend paid by a company which is a resident of Spain to a company which is a resident of China and which owns not less than 10 per cent of the shares of the company

paying the dividend, the credit shall take into account the tax paid to Spain by the company paying the dividend in respect of its income.

ARTICLE 25

NON-DISCRIMINATION

The   nationals   of   a   Contracting  State   shall   not   be

subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements
to which nationals of that other State in the same circumstances are or may be subjected. This provision shall, notwithstanding the provisions of Article 1, also apply to persons who are not residents of one or both of the Contracting States.

The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. This provision shall not be construed as obliging a
Contracting State to grant to residents of the other Contracting State any personal allowances, reliefs and reductions for tax purposes on account of civil status or family responsibilities which it grants to its own residents.
Except where the provisions of Article 9, paragraph 6 of Article 11, or paragraph 6 of Article 12, apply, interest, royalties and other disbursements paid by an enterprise of a Contracting State to a resident of the other Contracting State
shall, for the purpose of determining the taxable profits of such enterprise, be deductible under the same conditions as if they had been paid to a resident of the
first-mentioned State. Similarly, any debts of an enterprise of a Contracting State to a resident of the other Contracting State shall, for the purpose of determining the taxable
capital of such enterprise, be deductible under the same conditions as if they had been contracted to a resident of the first-mentioned State.
Enterprises of a Contracting State, the capital of which is
wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned Contracting State to any taxation or requirement connected therewith which is other
or more burdensome than the taxation and connected requirements to which other similar enterprises of that first-mentioned State are or may be subjected.
The provisions of this Article shall, notwithstanding the provisions of Article 2, apply to taxes of every kind and description.

ARTICLE 26

MUTUAL AGREEMENT PROCEDURE

Where a person considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Agreement, he may, irrespective of the remedies provided by the
domestic law of those States, present his case to the competent authority of the
Contracting State of which he is a resident or, if his case comes under paragraph 1 of Article 25, to that of the Contracting State of which he is a national. The case must be presented within three years from the first notification of the action resulting in
taxation not in accordance with the provisions of the Agreement.
The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the provisions of this Agreement. Any agreement reached shall be
implemented notwithstanding any time limits in the domestic laws of the Contracting States.
The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the
interpretation or application of the Agreement. They may also consult together for the elimination of double taxation in cases not provided for in this Agreement.
The competent authorities of the Contracting States may communicate with each other directly for the purpose of reaching an agreement in the sense of paragraphs 2 and 3. When it seems advisable for reaching agreement, representatives of the competent authorities of the Contracting States may meet together for an oral exchange of opinions.

ARTICLE 27 EXCHANGE OF INFORMATION

The   competent   authorities   of   the   Contracting   States   shall

exchange such information as is necessary for carrying out the provisions of this Agreement or of the domestic laws of the Contracting States concerning taxes covered by the Agreement. Insofar as the taxation thereunder is not contrary to this Agreement, in particular for the prevention of evasion of such taxes. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall
be treated as secret in the same manner as information obtained under the domestic
laws of that State, and shall be disclosed only to persons or authorities
(including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in
relation to, the taxes

covered by the Agreement. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions.

In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation:

(a) to carry out administrative measures at variance with the laws
and the administrative practice of that or of the other Contracting State;

(b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other
Contracting State;

(c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy.

ARTICLE 28

DIPLOMATIC AGENTS AND CONSULAR OFFICERS

Nothing in this Agreement shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of international
law or under the provisions of special agreements.

ARTICLE 29 ENTRY INTO FORCE

 After   mutual   notifications   of   the   completion   of   legal

procedures by the Contracting States, the present Agreement shall enter into force on
the date of the later notification.

This Agreement shall have effect as respects income and capital relating to the taxable years beginning on or after the first day of January next
following that in which this Agreement enters into force.

ARTICLE 30 TERMINATION

This Agreement shall continue in effect indefinitely but either of the Contracting States may, on or before the thirtieth day of June in any calendar year beginning after the expiration of a period of five years from the date of its
entry into force, give

written notice of termination to the other Contracting State through
the diplomatic channel. In such event this Agreement shall cease to have effect as respects income and capital relating to the taxable years beginning on or after the first day of January in the calendar year next following that in which the notice of termination is given.

DONE at Beijing on 22, November, 1990, in duplicate in the Chinese,
Spanish and English languages, all three texts being equally authentic. In case of any divergence of interpretation, the English text shall prevail.

For the Government For the Government of the People’s Republic of China of Spain

China - Spain Tax Treaty

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