Purpose and general regime of the deduction
Object of the deduction
This deduction is intended to prevent income obtained abroad by IRPF taxpayers from being subject to this tax in Spain and also to a tax of a similar nature abroad.
General deduction regime
In cases where, among the taxpayer's income, income or capital gains obtained and taxed abroad appear, the lesser of the following two amounts will be deducted:
The effective amount of what was paid abroad due to a tax of an identical or analogous nature to Personal Income Tax or the Non-Resident Income Tax as a consequence of obtaining said returns or capital gains.
The result of applying the average effective tax rate to the part of the taxable base taxed abroad.
For these purposes, the average effective tax rate will be the result of multiplying by 100 the quotient obtained by dividing the total net amount by the taxable base. To this end, the type of tax that corresponds to general income and savings must be differentiated, as appropriate. The tax rate thus determined will be expressed with two decimal places.
For the application of the deduction for international double taxation to income obtained abroad that forms part of the liquidable base of savings, the average effective rate (AMR) corresponding to the liquidable base of savings (without any decomposition of this base) is will apply to the part of the taxable base of the savings obtained abroad, differentiating, in relation to the latter, depending on whether the income obtained abroad is a return or a capital gain.
On the other hand, the average effective rate (AMR) corresponding to the general taxable base will be applied to the part of the general taxable base obtained abroad without breaking down the latter between returns and profits.
Note: When income is obtained abroad or through a permanent establishment, the deduction for international double taxation mentioned above will be applied, without the procedure for eliminating double taxation provided for in article 22 of the LIS being applicable. ##1##.
Regarding LIS see Law 27/2014, of November 27, on Corporate Tax.