PROTOCOL
At the signing of the Agreement between the Kingdom of Spain and the Government of New Zealand for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, the undersigned have agreed upon the following provisions which shall be an integral part of the Agreement.
I.
With reference to Article 2:
(a)
It is agreed that if New Zealand should introduce a local authority income tax this Agreement will apply to that tax.
(b)
It is understood that when applying Articles 10, 11 and 12 or when a credit is given by one Contracting State for tax paid to the other Contracting State, tax or credit does not cover a penalty or interest imposed for late payment or non-compliance under the laws of either Contracting State. It is further understood that this does not affect any relief for such penalties or interest, when and if necessary, as may be agreed by mutual agreement under Article 23 or otherwise.
II.
With reference to Article 4:
For the purposes of this Agreement, a person who applies for a certificate of residence will be issued with such a certificate stating the residence status of that person in a Contracting State. This certificate will, in accordance with the laws of each State, clearly manifest the person’s condition of residence in the Contracting State for the purposes of the Agreement.
III.
With reference to Article 10:
It is agreed that:
(a)
should New Zealand significantly amend the Foreign Investor Tax Credit rules in subpart LE of the Income Tax Act 1994, the New Zealand Competent Authority shall inform the Spanish Competent Authority of this amendment with a view to reviewing Article 10; and
(b)
should Spain significantly amend its taxation of dividends derived by non-residents, the Spanish Competent Authority shall inform the New Zealand Competent Authority of this amendment with a view to reviewing Article 10.
When such significant amendment derives from the European Union Regulatory framework, including European Union Court decisions, the Spanish Competent Authority shall inform the New Zealand Competent Authority of this amendment with a view to reviewing, if possible, Article 10.
IV.
With reference to Articles 10, 11, 12:
It is further agreed that if in any future Double Tax Agreement with any other State, being a member of the Organisation for Economic Co-operation and Development, New Zealand should limit its taxation at source of dividends, interest and royalties to a rate lower than the one provided for in any of such Articles, New Zealand shall without undue delay enter into negotiations with Spain to review the Articles with a view to providing the same treatment.
V.
With reference to Articles 10, 11 and 12:
It is understood that a trustee subject to tax in a Contracting State in respect of dividends, interest or royalties shall be deemed to be the beneficial owner of those dividends, interest or royalties.
VI.
With reference to Article 20:
It is agreed that if an item of income arises to be dealt with under that Article the competent authorities of the Contracting States shall negotiate to reach a satisfactory solution as to how the item should be taxed.
VII.
With reference to Article 21:
It is understood that credit is given for underlying corporation tax under the domestic laws of each Contracting State. If either Contracting State amends significantly its domestic laws relating to underlying corporation tax credits, the competent authority of that State shall inform the competent authority of the other Contracting State of those changes.
VIII.
With reference to Articles 26 and 27:
It is understood that the terms “income year”
and “tax year”
have the same meaning to the extent that they both refer to the year in which income is allocated for tax purposes. The difference in terms used by each Contracting State is exclusively based, with regard to New Zealand, on matters of internal law drafting, and, with regard to the Kingdom of Spain on usual Double Tax Agreement drafting.