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V2414-17 27 September 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · renta mundial

Spanish residents must declare worldwide income, including earnings from Ecuador

A taxpayer inquires about the tax treatment of investments in an Ecuadorian promoter. The Tax Authority responds that Spanish residents must declare their worldwide income and apply the double taxation avoidance treaty with Ecuador.

The question raised

Tax treatment of income obtained for Personal Income Tax purposes.

The DGT's ruling

A tax resident in Spain must include their entire income in their tax base, including income obtained in Ecuador, pursuant to Article 2 of Law 35/2006. To avoid double taxation, if the income is taxed in both countries, the deduction method established in Article 24 of the Convention between Spain and Ecuador shall apply. Said deduction may not exceed the portion of the tax corresponding to the income that may be taxed in the other State.

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