Most common provisions of the Agreements

Agreements. Capital gains

The tax authority depends on the capital from which the net gains are derived:

• For gains obtained by a resident of one Country from the disposal of real property located in another Country, the Country of location has the authority to tax the capital gain. (For example, a resident of Portugal obtains net gains from the sale of real estate in Spain. The gains will be subject to taxation in Spain).

• On the other hand, earnings derived from the transfer of any other kind of asset can, in general, only be taxed by the state in which the transferor resides (for example, for the sale of shares in a Spanish company by a resident of Portugal. Capital gains will be exempt in Spain by agreement).

However, there may be other provisions in a specific Convention, so consultation of the Convention is always required.