International Taxation

Among the targets of a suitable tax planning of projects implemented abroad, we can mention:

• Estimate actual costs and expenses arising from projects involving supplies of goods and rendering of services abroad, prior to making an offer to end customer.
• Avoiding international double taxation scenarios resulting from the provision of services abroad.
• Prevent or minimize the impact of any withholding tax at destination arising from the provision of services abroad, and foresee a refund procedure when applicable.

Paloma Gómez Miranda, Head of the International Taxation and Customs Department of ​​our Firm, is a member of ICC Spain International Tax Commission.

Some examples of our services in this field:

1/ Following a supply contract, a Spanish manufacturer posts a worker to Kuwait to provide equipment maintenance services. 5% of the price invoiced for this service is withheld by its client upon payment. Is it possible to obtain a refund of the amount withheld, or will it become an unforeseen cost for the Spanish manufacturer?

2/ A Spanish company dealing with design and installation of photovoltaic plants carries out a project in Brazil, with an expected duration of 4 months. According to the Spain-Brazil Convention for the avoidance of double taxation, a building site or construction or installation project which exists for more than 6 months, constitutes a permanent establishment. How is this 6-month term calculated? What happens if the installation finally takes more than six months, or is temporarily suspended due to a problem in the customs import clearance of the supplies? Where should posted workers pay their taxes?

3/ A Spanish manufacturer of industrial solutions is subcontracted by a German company for the supply and installation of a storage tank within the framework of an EPC contract for the construction of a chemical plant. The German company withholds 15% of the price paid, by stating that such services are related to the construction sector in Germany. Could such withholding tax have been avoided? Is it possible to get a refund? In which country?