The new double tax treaty between Spain and the Dominican Republic entered into force on 25 July 2014.
Key features of the new treaty
Dividends: withholding tax of 10 per cent unless recipient entity directly holds at least 75 per cent of the capital of the entity distributing the dividend.
Interest and royalty payments: withholding tax of 10 per cent
Capital gains: as a general rule, taxable in the State where the transferor is resident. Nonetheless, in the following cases taxation in the source State would arise: (i) gain deriving from immovable property in the source State, or (ii) gain deriving from the transfer of shares of an entity whose assets consist of at least 40 percent in immovable property in the source State.
The Treaty entered into force on 25 July 2014, and will be applicable from that date to withholding taxes. In relation to other taxes, the provisions of the Treaty will be applicable in Spain from 1 January 2015 onwards.