How to Avoid Double Taxation: Tax Agreements
We’ll be diving into how to avoid double taxation when living abroad. First we will talk you through some theoretical issues. Next we will see how it applies to different countries, like the US and the UK.
First and foremost, what is double taxation?
Double taxation occurs when a taxpayer is taxed on the same income by more than one country. It happens to retirees living abroad, that my be taxed in their country of citizenship and in the country of residence.
Tax treaties to avoid double taxation (DTA, Double Taxation Agreement), countries sign tax treaties. There are two main models for double taxation treaties:
The United Nations (UN) convention applies the Source Principle: Income is taxed in the country where it is generated.
The Organisation for Economic Co-operation and Development (OECD) convention advocates for the Residence Principle: Taxation is based on the taxpayer’s residence.
While the UN (United Nations) Model Tax Convention on Income and on Capital is another influential model, it is more commonly used by some developing countries. As an example, Both the United States and the United Kingdom negotiate their double tax treaties based on the OECD Model.
Important !
All double taxation treaties signed by Spain follow the OECD Model Tax Convention.
The OECD stands for the Organisation for Economic Co-operation and Development.
Tax Guide 2026
If you need an overall view of tax obligations, click on Taxes in Spain Guide 2026.
How does it work?
Now, let’s discuss some practical tips individuals to avoid falling victim to double taxation. There are two regulations that complete the issue on non-residents:
- Tax Administrations have tax conventions signed with different countries.
- Tax administrations usually have their own regulations that will apply if there is not tax convention on the matter or there are some gaps on the tax convention.
If you need updated information, both the IRS and HMRC offer user-friendly online portals that make accessing information on tax agreements convenient. You can also find Tax Agreements in Spanish Tas Agency, AEAT.
AEAT
Spain: Agencia Estatal de Administración Tributaria
Website: AEAT
You can find a list of countries and treaties and agreements signed by Spain with other countries in tax matters.
IRS
USA: Internal Revenue Service
Website: IRS
Publication 901 offers detailed information on each treaty and the benefits they provide.
HMRC
UK: His Majesty’s Revenue & Customs
Website: HMRC
Double Taxation Relief Manual: provides detailed guidance on the UK’s rules.
Individuals are usually taxed based on their residency status. Tax treaties often include specific criteria for determining residency.
Watch our Youtube video on Double Taxation
The OECD condensed Tax Convention Model
