The Economic Agreement is the traditional foral system by virtue of which the financial and tax relations between the Spanish state and the Basque Autonomous Community are set up.

The Economic Agreement, passed by the Law 12/2002, May 23, lays down the general principles applicable to those financial and tax relations, the rules to distribute competences concerning the different tax figures, the rules to determining the financial flows between the Basque Country and the Spanish state and the Committees in charge of solving any issue in relation with the application of the Economic Agreement.

Chapter I contains in its section 1 the general rules applicable to tax relations, while sections 2 to 15 determine the rules of distribution of powers of the different tax figures and, finally, section 16 includes management and procedure rules.

Chapter II, after identifying in section 1 the general principles applicable to financial relations, section 2 develops the methodology between the Basque Country and the State.

Finally, Chapter III enumerates and develops the functions of the different Committes in charge of settling any questions that affect its application.

In addition to the three chapters mentioned, the Agreement contains six additional provisions, thirteen transitory provisions and one final provision. Among them, the Second Additional Provision stands out, which provides that any modification of the Agreement must be carried out by the same procedure followed for its approval (agreement in the Mixed Commission of the Economic Agreement and approval by law processed by the single article procedure without amendments) as well such as the obligation to adapt the Economic Agreement in the event that there is a reform in the tax legal system of the State that affects the settlement of taxes, there is an alteration in the distribution of regulatory powers that affects the scope of the indirect taxation or new tax figures or payments on account will be created.