Tax
Regime
8
70
STRUCTURE ORGANISATION AND OPERATION
OF THE SPANISH SECURITIES MARKET
B. Non-resident investors
TAX ON INCOME OF NON-RESIDENTS (IRNR)
The Tax on Income of Non-residents is a direct tax
charged on income generated in Spanish territory by
individuals or institutions not resident in the country.
The regime applied is determined by the normal resi-
dence in Spanish territory and the existence of income
obtained in this territory and not exempt from taxation
in Spain, depending on the concurrence or not of a
“permanent establishment” and the existence or not of
a double taxation treaty between Spain and the country
of residence of the non-resident.
The Law makes a distinction when defining the
taxation of non-residents between income subject to
Tax on Income of Non-residents obtained or not via a
“permanent establishment” located in Spanish territory.
INCOME OBTAINED VIA PERMANENT ESTABLISH-
MENTS
A non-resident, whether an individual or an ins-
titution, conducts operations in Spanish territory via a
“permanent establishment” when they have on a conti-
nuous basis installations or workplaces in Spanish terri-
tory for all or part of their activity, or when they operate
in Spain through an authorised agent to hire in their
name and on the account of the non-resident person
or institution.
The tax rate for non-residents with a “permanent
establishment” in Spain is 30% since 2008.
INCOME OBTAINED WITHOUT
A PERMANENT ESTABLISHMENT
When there is a double taxation agreement bet-
ween the country of the non-resident and Spain, the
non-resident is subject to it.
Article 14 of the Law on Tax on Income of Non-
residents, in its new drafting under Law 35/2006, deter-
mines which type of income is tax-exempt:
1) Income exempt from Personal Income Tax.
2) Interest payments and other yields obtained from
the transfer to third parties of the capital of resi-
dents in another EU member state.
3) Public debt yields.
4) Income from the transfer of securities or the repay-
ment of units in mutual funds in official secondary
securities markets in Spain, obtained by someone
resident in a country with whichSpain has a double
taxation agreement with an information exchange
clause.
5) The first €1,500 of dividends and participation
in profits obtained by individuals resident in another
EU member state or in countries or territories with
whom there is an effective exchange of tax informa-
tion. Applicable on all the yields obtained during the
natural year.
Yields and capital gains from countries or territo-
ries classified as tax havens are not exempt.
The tax rate is 21% for dividends and other yields
derived from the participation in the shareholders’
equity of a company, interest payments and other
yields obtained from the transfer to third parties of own
capital and capital gains manifested with the transfer
of capital elements (Article 25 1. f) of the Law on Tax
on Income of Non-residents, approved by Royal Legis-
lative Decree 5/2004, in the new drafting under Law
26/2009 of December 23, 2009.
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