Eduardo González
The Council of Ministers past Tuesday submitted to the Cortes Generales (Spanish Parliament) the Agreement between Spain and Paraguay to avoid double taxation and to prevent tax evasion or avoidance in matters of income taxes, while authorizing the expression of Spain’s consent to be bound by said Convention.
The objective of this Agreement is to promote economic relations, stimulate investments and strengthen bilateral cooperation in tax matters between both countries, without generating opportunities for non-taxation or reduced taxation through tax evasion or avoidance, including avoidance strategies through abusive use of agreements by third parties.
The signing of the Double Taxation Agreement between Spain and Paraguay was authorized by the Council of Ministers on February 28, 2023. The agreement was signed in Santo Domingo (Dominican Republic) on March 25, 2023.
The decision of the Council of Ministers comes a few days after the president of Paraguay, Santiago Peña, makes his first visit to Spain since taking office in August of last year.
Peña, a young economist who won the last elections at the head of the Colorado Party, arrived in Barcelona yesterday to speak, as the main speaker, at the Mobile World Congress, which will take place from today until the 29th and which opened with a dinner, in which His Majesty the King was present. Don Felipe welcomed the president of Paraguay, present at the dinner
After his intervention in Congress, Peña will travel to Madrid on the 28th and 29th, where he will be received by the King with whom he already had the opportunity to talk when Don Felipe went to Asunción to represent Spain at his inauguration. Likewise, Peña’s agenda includes a meeting with the President of the Government, Pedro Sánchez, in which they will have the opportunity to address both bilateral relations and the negotiations of the agreement between the European Union and Mercosur, since Paraguay assumed the rotating presidency of the American bloc last December. The Paraguayan president will also participate, on the 28th, in a meeting with Spanish businessmen who have interests in Paraguay or who could have them, both to increase investments and commercial exchanges.
It is precisely in this sense that the authorization of the Convention to avoid double taxation is of special interest, which establishes the criteria relating to the taxation of real estate income, business profits, maritime and air transport, associated companies, dividends, interests, fees or royalties. , capital gains, dependent personal services, remunerations as directors and directors, income from artists and athletes, pensions, public functions, students and other income.
This Agreement integrates the latest changes that have occurred in the Model Tax Agreement of the Organization for Economic Cooperation and Development (OECD) to avoid double taxation and within the framework of the Action Plan against the erosion of the Tax Base and the transfer of profits from the OECD/G20, to combat international tax avoidance by large multinationals.
