Good to know · Taxes
US-Spain income tax treaty (1990, as amended by the 2013 Protocol)
The United States and Spain have an income tax treaty signed in Madrid, originally dated 1990 (the 'Convention Between the United States of America and the Kingdom of Spain for the Avoidance of Double Taxation'), later amended by a Protocol signed in 2013 (with an accompanying 2014 Technical Explanation of the Protocol). The treaty and its protocol are intended to reduce double taxation and allocate taxing rights between the two countries for various income types (employment income, dividends, interest, royalties, pensions, etc.) and include tie-breaker rules for dual residents and mutual agreement procedures. Critically for US citizens, Article 1, paragraph 3 of the treaty contains a 'saving clause': it allows the United States to tax its own citizens and residents as if the treaty did not exist, overriding most treaty benefits for US citizens regardless of where they live. Paragraph 4 of the same article carves out a short list of exceptions that remain available to US citizens living abroad even under the saving clause, including provisions on associated enterprises, certain pensions/child support, relief from double taxation, non-discrimination, and the mutual agreement procedure (the specific treaty articles referenced are those covering associated enterprises, pensions/alimony/child support, relief from double taxation, non-discrimination, and mutual agreement), plus certain government-service, student, and diplomatic benefits for individuals who are neither US citizens nor immigrants.
- Why it matters
- US citizens often assume a tax treaty eliminates double taxation entirely; for US citizens, the saving clause means the treaty mostly protects against double taxation via the relief-from-double-taxation/foreign-tax-credit mechanism rather than by exempting them from US tax altogether. This is a frequent source of confusion for Americans relocating to Spain who expect the treaty to function the way it would for a non-citizen resident.
- When
- Any US citizen with Spanish-source income, Spanish tax residency, or income/assets in both countries who is trying to determine which country taxes what and how double taxation is relieved.
- How long it takes
- The treaty is a standing instrument (no annual renewal); it is applied each tax year as income arises.
- Official page
- Last checked
- 15 Oct 2026
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