Scope, content and requirements of the special regime

Note: in accordance with the Sixth Additional Provision of Law 10/2021, of July 9, on remote work ( BOE of 12) natural persons who acquire the status of taxpayers for the IRPF as a result of their travel to Spanish territory on the occasion of the final of the " UEFA Women's Champions League 2020 " may choose to pay the Non-Resident Income Tax, under the terms and conditions provided for in article 93 of the IRPF Law .

Scope

Regulations: Art. 113 Personal Income Tax Regulations

To apply this special regime, taxpayers must meet the following conditions:

That they have not been residents in Spain during the ten tax periods prior to the one in which they move to Spanish territory.
That the transfer to Spain took place as a result of any of the following circumstances:
- As a result of a work contract, with the exception of special employment agreements with professional sportspeople regulated by Royal Decree 1006/1985 of 26 June.
  
  This condition will be deemed to be met when an employment relationship, ordinary or special, other than the one indicated above, or statutory, is initiated with an employer in Spain, or when the transfer is ordered by the employer and there is a transfer letter from the employer.
- As a consequence of acquiring the status of director of an entity in whose capital he does not participate or, otherwise, when the participation in the same does not determine the consideration of a related entity in the terms provided for in article 18 of the Corporate Tax Law.
That it does not obtain income that would be classified as obtained through a permanent establishment located in Spanish territory.

Contents of the special regime

Regulations: Art. 114 Personal Income Tax Regulations

The application of this special regime will involve the determination of the tax debt of IRPF in accordance with the rules established in the consolidated text of the Non-Resident Income Tax Law, approved by Royal Legislative Decree 5/2004, of March 5 (hereinafter TRLIRNR ), for income obtained without the mediation of a permanent establishment with the following specialties:

a. The provisions of articles 5, 6, 8, 9, 10, 11 and 14 of the aforementioned TRLIRNR shall not apply.

b. All work income obtained by the taxpayer during the application of the special regime will be deemed to have been obtained in Spanish territory.
However, income derived from an activity carried out prior to the date of transfer to Spanish territory or after the end of the transfer, which must be reported in form 149, is not considered to have been obtained during the application of the special regime, without prejudice to its taxation by the Non-Resident Income Tax when the aforementioned income is understood to have been obtained in Spanish territory.

c. For the purposes of settling IRPF , the income obtained by the taxpayer in Spanish territory during the calendar year will be taxed cumulatively, without any compensation between them being possible.

d. To determine the full rate, two taxable bases are distinguished to which different scales will be applied:

Base "A": Amount of the taxable base corresponding to the following income referred to in article 25.1. f) of TRLIRNR :

Dividends and other income derived from participation in the equity of an entity.
Interest and other revenues obtained by the assignment of equity capitals to third parties.
Capital gains that arise from the transfer of assets.

The rates indicated in the following scale will be applied to this base in 2021:

Savings taxable base Up to euros	Full amount euros	Remaining taxable base of savings Up to euros	Applicable type Percentage
0	0	6,000	19
6,000	1,140	44,000	21
50,000	10,380	150,000	23
200,000	44,880	From there on	26

Base "B": Amount of the taxable base corresponding to the rest of the income to which the rates indicated in the following scale will be applied in 2021.

Part of the taxable base
euros Applicable State Type
Percentage

Up to 600,000 euros 24

From 600,000.01 euros onwards 47

Part of the taxable base euros	Applicable State Type Percentage
Up to 600,000 euros	24
From 600,000.01 euros onwards	47

e. The differential rate will be the result of reducing the full rate of IRPF by:

Deductions for donations and withholdings and payments on account that have been made on the taxpayer's income (including the amounts paid on account of the Non-Resident Income Tax).

Withholdings and payments on account for tax payments will be made under the terms established by regulation, in accordance with the regulations on Non-Resident Income Tax.

However, the percentage of withholding or payment on account of work income will be 24 percent. When the remuneration paid by the same payer of employment income during the calendar year exceeds 600,000 euros, the withholding percentage applicable in 2021 to the excess will be 47%.

New in 2021: Article 61 of Law 11/2020, of December 30, on the General State Budget for the year 2021 ( BOE of 31), modifies the scales of article 93 of the Law of Personal Income Tax applicable in the special regime for workers posted to Spanish territory by raising the tax rates. In accordance with the above, the maximum retention percentage is raised from 45 to 47 percent.
The deduction for international double taxation referred to in article 80 of the Income Law applicable to work income obtained abroad, with a limit of 30% of the portion of the full rate corresponding to all work income obtained in that tax period.

For these purposes, to calculate the average effective tax rate, the full rate and the taxable base must be taken into account, excluding, in both cases, the part thereof corresponding to the income referred to in article 25.1 f) of the TRLIRNR .

Duration

Regulations: Art. 115 Regulation Income Tax

The special regime will apply during the tax period in which the taxpayer acquires his habitual residence in Spain and during the following five tax periods.

For these purposes, the tax period in which residency is acquired will be considered to be the first calendar year in which, after the transfer has taken place, the stay in Spanish territory is greater than 183 days.

Exercising the option for the special regime

Regulations: Articles 116 and 119 Regulation IRPF

The option to pay Non-Resident Income Tax must be exercised using communication form 149, approved by Order HAP /2783/2015, dated December 21 ( BOE of the 23rd), which must be submitted within a maximum period of six months from the date of commencement of the activity as recorded in the registration with Social Security in Spain or in the documentation that allows, where applicable, the worker to maintain the Social Security legislation of origin.

To submit this communication, they must be included in the Census of Taxpayers. Otherwise, they will first request registration in said Census by submitting the corresponding census declaration.

In addition, the following documentation must be attached to the option communication:

When starting an employment relationship, ordinary or special, or statutory, with an employer in Spain, a supporting document issued by the employer stating the recognition of the employment or statutory relationship with the taxpayer, the start date of the activity that appears in the registration with Social Security in Spain, the workplace and its address, as well as the duration of the employment contract.
In the case of a transfer ordered by your employer, a copy of the employer's transfer letter, as well as a supporting document issued by the employer stating the start date of the activity that appears in the registration with Social Security in Spain or in the documentation that allows, where applicable, the maintenance of the Social Security legislation of origin, the workplace and its address, as well as the duration of the transfer order.
In the case of transfers as a result of acquiring the status of director of an entity, a supporting document issued by the entity stating the date of acquisition of the status of director and that the taxpayer's participation in the entity does not determine the status of related entity in the terms provided for in article 18 of the Corporate Tax Law.

The taxpayer must also report the end of his/her transfer to Spanish territory in Form 149 within one month of this circumstance occurring.

Note: The taxpayer who opts to pay the Non-Resident Income Tax will be subject to the Wealth Tax by real obligation.

Resignation and exclusion from the special regime

Regulations: Articles 117 and 118 Regulation IRPF

Taxpayers who have opted for the special regime may waive its application during the months of November and December prior to the start of the calendar year in which the waiver must take effect. Taxpayers who opt out of this special regime will not be able to opt for its application again.

Exclusion from the special regime occurs due to non-compliance with any of the previously mentioned conditions determining its application, taking effect in the tax period in which the non-compliance occurs. Excluded taxpayers must report such circumstance to the tax authorities within one month of non-compliance with the conditions that determined its application.

Both the waiver and the exclusion must be communicated to the Tax Administration in form 149, approved by Order HAP /2783/2015, of December 21 ( BOE of the 23rd).

Special IRPF declaration model

Taxpayers who opt for this special regime must submit and sign their declaration for the IRPF in the special form 151, approved in the aforementioned Order HAP/2783/2015, of December 21 ( BOE of the 23rd), in the place and period established, in general, for the presentation of the declarations of the IRPF .

Taxpayers of the IRPF who choose to apply this special regime may request the certificate of tax residence in Spain regulated in the second Additional Provision of Order HAC /3316/2010, of December 17 ( BOE of the 23rd), whose models appear in Annexes IV and V of said Order.