Contents of the special regime

Regulations: Art. 114 Regulation Income Tax

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. However, the income from work in kind referred to in letter a) of article 14.1 of TRLIRNR will be exempt.

The aforementioned article 14 of the TRLIRNR regulates exempt income and, in its letter a), refers, among others, to the income mentioned in article 7 of the Personal Income Tax Law .

b. All of the income from economic activities classified as an entrepreneurial activity or of the income from work 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 2023 :

  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	100,000	27
  300,000	71,880	From there on	28

• 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 2023 .

  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 payments on account of the tax will be made, in accordance with the regulations established in accordance with the regulations on the Income Tax for Non-Residents for income obtained without the mediation of a permanent establishment.

  Notwithstanding the foregoing, in the case of income from economic activities, only income from activities classified as professional will be subject to withholding or income on account.

  The percentage of withholding or payment on account of work income will be 24 percent. Now, when the remuneration paid by the same payer of employment income during the calendar year exceeds 600,000 euros, the withholding percentage applicable in 2023 to the excess will be 47%.

  In the case of income from economic activities subject to withholding or payment on account, the applicable withholding rate must be indicated on invoices issued during the application of this special regime.

  In the case of transfers of real estate located in Spanish territory, the purchaser will be obliged to retain and pay 3%, or make the corresponding payment on account, of the agreed consideration, as payment on account of the tax corresponding to those properties.

• The deduction for international double taxation referred to in article 80 of the Personal Income Tax Law applicable to income from work and economic activities qualified as entrepreneurial activity obtained abroad, with a limit of 30 percent of the part of the full quota corresponding to all of said 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 .