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ExpatriatesSpanish personal income tax legislation contains a highly attractive regime for personnel assignedto Spain by multinational enterprises, since it allows individuals who become tax resident in Spainas a result of their assignment there to elect to be taxed either under the Spanish personal incometax rules or under the non-resident income tax rules during the tax period in which their taxresidence changes and for the next five tax periods.If they choose the latter, expatriates are only taxed on income and gains considered to have beenobtained in Spain, at a standard rate of 24.75%.Double Taxation Treaties in force with SpainSpain has signed a series of treaties with Germany, Saudi Arabia, Algeria, Argentina, Australia,Austria, Belgium, Bolivia, Bosnia and Herzegovina, Brazil, Bulgaria, Canada, Czech Republic,Chile, China, Colombia, South Korea, Costa Rica, Croatia, Cuba, Denmark, Ecuador, Egypt,UAE, Slovakia, Slovenia, United States, Estonia, Finland, France, Greece, Holland, Hungary,India, Indonesia, Iran, Ireland, Iceland, Israel, Italy, Jamaica, Japan, Latvia, Lithuania,Luxembourg , Macedonia, Malaysia, Malta, Morocco, Mexico, Moldova, Norway, New Zealand,Poland, Portugal, United Kingdom, Romania, Russian Federation, El Salvador, Serbia, SouthAfrica, Sweden, Switzerland, Thailand, Trinidad and Tobago, Tunisia, Turkey, States of theformer USSR (except Russia), Venezuela and Vietnam.The main aim of these treaties is to give legal security and reduce taxation on foreign investors.Currently Spain has signed 91 double taxation treaties being 79 of them in force. The rest ofthem are pending with Armenia, Barbados, Georgia, Hong Kong, Kazakhstan, Kuwait, Namibia,Nigeria, Pakistan, Panama, Peru, Senegal, Singapore and Syria.Value added taxIn GeneralThe Spanish value added tax (VAT) legislation (Act Number 37/1992, which came into force on1 January 1993) implements the EU Directives on VAT, whose main rules are harmonized within the different member states.The tax is of an indirect nature, its main feature being that it does not normally imply any cost totraders or professionals, but only to end-consumers as traders are generally entitled to deductVAT borne against VAT charged.Within Spain, VAT is not applicable in the Canary Islands, Ceuta and Melilla.The Canary Islands Indirect General Tax (CIIGT) is based on VAT and is an indirect general taxlevied on goods and services supplied in the Canary Islands by traders and professionals and onimports of goods. The standard CIIGT rate is 5 %.Another indirect tax (tax on production, services and imports) is applicable in Ceuta and Melilla.32