Workers displaced to Spanish territory can be taxed under a special regime. At GD Global Mobility, we can advise you on the tax benefit that you can apply to the income obtained in Spain.
In recent years, a series of fiscal measures have been adopted with the aim of attracting qualified human capital, which is known as the “foreign citizen tax regime”, although its correct denomination in Income Tax Law is the Special Tax Regime Applicable to Workers Displaced to Spanish Territory.
Thus, those individuals who acquire the status of tax residents in Spain as a result of their transfer to Spanish territory for work reasons may choose to be subject to Non-Resident Income Tax (IRNR) instead of Personal Income Tax (IRPF).
Benefits of this Special Tax Regime
This regime includes important tax advantages for those cases in which the income obtained by taxpayers after their transfer to Spanish territory is a substantial amount or when the displacement is temporary.
In these cases, there is the possibility of:
- being taxed in Spain only on income from Spanish sources and not on income obtained outside this territory
- applying a fixed tax rate, of 24%, to income from work, instead of the marginal rate of 43% generally applied.
Demonstrating Tax Residence in Spain
To determine the status of the taxpayer subject to personal income tax, habitual residence in Spain must be proved. According to Spanish regulations, a natural person is a resident if they remain in the territory for more than 183 days during the calendar year, or if their main center or the base of their activities or economic interests lie in Spain, according to the LIRPF.
Sporadic absences are not counted unless tax residence in another country is proven.