Double-taxation treaty

Double-taxation treaty (DTT) is a bilateral treaty between two countries to prevent the same income from being taxed twice (in the source country and in the taxpayer's residence country).

How it works:

• Establishes rules to divide taxing rights between both countries.
• Defines tie-breaker rules for dual-residency cases (permanent home, center of interests, habitual abode, nationality).
• Regulates maximum withholdings on dividends, interest and royalties paid from one country to the other.
• Sets mechanisms to eliminate double taxation: exemption or tax credit.

Spain has DTTs in force with (partial list relevant to nomads):

• Portugal (1995)
• UAE (2006)
• Malta (2005)
• Thailand (1997)
• Panama (2010)

Spain does NOT have DTT with:

• Paraguay
• Georgia (signed, pending entry into force)
• Monaco

Practical implication: without a DTT, Hacienda isn't obligated to automatically accept your foreign tax residency certificate. The risk of fictitious-residency proceedings is higher.