Most common provisions of the Agreements
Distribution of tax authority in the Agreements, in general, for different types of income
Agreements. Interest
In general, in the case of interest, a shared tax regime is followed between the State of residence of the recipient of the interest and the State of the source. Therefore, interest originating in one State (Spain) and paid to a resident of another State is normally taxed in both States, although in the case of the State from which it originates (Spain) it is taxed according to the limit provided for in the Convention, which is usually 10%.
Therefore, when a resident of a Country that has signed an Agreement with Spain earns interest originating in Spain, it will be taxed in Spain using the limit stipulated in the Agreement which, as indicated above, will normally be 10%.
Nevertheless, it should be noted that in this area domestic Spanish law provides for certain exemptions, which are more beneficial than those provided for under the Agreements and which are fully applicable (Public Debt, community interests, etc.).