On 20 September 2013, the Ministry of Finance of Spain announced that the Council of Ministers has approved the agreement with the UK for the avoidance of double taxation and prevention of fiscal evasion with respect to income and equity.
The new treaty when it enters into force will replace the current agreement which was signed on October 1975.
According to the new treaty the dividend withholding tax rate for portfolio investors will be reduced from 15% to 10% and to 0% for direct investors and pension schemes.
The treaty would also reduce the withholding tax rates for interest and royalties to 0 percent. The agreement would follow the OECD model tax convention.
