Treaty between Spain and Ireland – Spanish Tax Administration applies dynamic interpretation for "royalties"

The General Directorate of Taxes of the Spanish Ministry of Finance has recently published a binding ruling dated 7 November 2008 by which it changes the traditional position of the Spanish Tax Administration regarding the scope of the term "royalties". The binding ruling responded to the taxpayer's question whether the payments made to a supplier resident in Ireland for the supply of standard packaged software are subject to withholding tax. The taxpayer was a wholesale distribu…