What is a tax treaty and to which cases does it apply?


Tax treaties are international treaties that are fiscal in nature and are signed by different states to prevent an income or asset from being taxed twice in different states.

Each state is responsible for reaching an agreement to avoid double taxation. These agreements can be bilateral – between two countries – or multilateral – multiple countries sign.

From an international point of view, agreements to prevent double taxation are essential for protecting the fiscal sovereignty of countries, and for avoiding situations that promote fraud and tax evasion. The idea is to reach an amicable agreement in establishing a procedure to avoid possible disputes in the future.

The international agreements that can be applied to different areas are:

  • Agreements surrounding income tax of individuals (natural and legal) and of wealth.
  • Agreements on income relating to international maritime and aerial navigation.
  • Inheritance tax agreements.

Therefore, when a person decides to relocate themselves to a new country to work remotely, they must keep these agreements in mind to avoid paying taxes twice for their earned income. Below we list the agreements that stand between Spain, Ireland, and Italy.