Article 25 - Elimination of double taxation

Elimination of double taxation: treaty permits residence-state tax deductions for taxes paid abroad, with special dividend and deemed-tax rules.

The Convention requires residence-state relief: India allows a deduction from Indian income or capital tax for tax paid in Spain on income or capital taxable there, limited to the Indian tax attributable to that income or capital; income taxable only in Spain may be included in India's tax base with a corresponding deduction. Spain similarly permits deductions for Indian tax paid, includes a special additional consideration for dividends paid to qualifying Spanish corporate shareholders, and may treat exempted foreign income as part of the tax computation. 'Income-tax paid in India' may include taxes forgone under specified exemptions for an initial ten-year period.