Spanish Non-Resident Income Tax: Rules and Obligations

1. Joint and Several Liability (Non-Resident)

Under Article 9 of the Non-Resident Income Tax Law (IRNR):

• The payer of income accrued without a permanent establishment (PE) and the custodian or manager of assets or rights not assigned to a PE are jointly liable for tax debts.
• This applies especially when income or assets belong to residents in non-cooperative jurisdictions.
• Joint liability does not exist when withholding is mandatory.
• Representatives of IRNR taxpayers not resident in an EU or EEA Member State (with mutual assistance rules) operating through a PE or income attribution entity in Spain are also jointly liable for tax debts related to such income.

2. Taxation of Pensions Obtained in Spain

Pensions are deemed obtained in Spain when:

• They arise from work carried out in Spanish territory.
• They are paid by a Spanish resident or a PE in Spain.

General Tax Scale

• Up to €12,000: 8%
• Next €6,700: 30%
• Above €18,700: 40%

Only donation deductions and withholdings made can be subtracted from the tax due.

Example: A €13,200 annual pension from Spain to a Paraguay resident (no tax treaty) results in a €1,320 tax due (average rate: 10%).

3. Non-Resident: Supplementary Taxation

• When non-resident entities with a PE in Spain transfer income abroad, a supplementary tax of 19% is applied on the transferred amounts.
• Exceptions: This tax does not apply if the PE’s head office is resident in an EU/EEA state (with mutual information exchange), unless it is a non-cooperative jurisdiction, or the tax treaty provides otherwise with reciprocal treatment.

4. Optional Scheme: EU/EEA Taxpayers

• Taxpayers resident in an EU or EEA Member State with mutual assistance in tax information may opt for this regime.
• They are not required to appoint a representative in Spain.
• They may deduct expenses when calculating the tax base, if:
  • Individuals: Expenses must be allowed under Spanish Personal Income Tax Law and directly linked to income from Spain.
  • Entities: Expenses must comply with Corporate Tax Law under the same conditions.
• This regime ensures equal treatment with Spanish residents regarding allowable deductions and simplified representation.