Spanish Supreme Court rules on dynamic interpretation of tax treaties and “substance-over-form” characterization of cross-border transfer of client and operational data

Spain’s Supreme Court recently ruled that the remuneration agreed in consideration for a certain operation of "transfer" of customer and "operational" data between a Spanish entity and a related German entity must be characterized as a royalty within the meaning of the Germany-Spain tax treaty.

The Judgment of the Supreme Court analyzed two relevant issues from the perspective of international taxation: the dynamic interpretation of tax treaties and characterization of payments derived from trans…