Content of the special regime

Regulations: Art. 114 Regulation Personal Income Tax

The application of this special regime will imply the determination of the Personal Income Tax tax debt in accordance with the rules established in the consolidated text of the Non-Resident Income Tax Law, approved by the 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 will not apply. However, income from work in kind referred to in letter a) of article 14.1 of TRLIRNR will be exempt.

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

b. The entire of the income from economic activities classified as an entrepreneurial activity or of the work income obtained by the taxpayer during the application of the special regime will be understood as obtained in Spanish territory.

However, income derived from an activity carried out prior to the date of movement to Spanish territory or after the completion of the movement, which must be communicated in form 149, is not considered to have been obtained during the application of the special regime, without prejudice to their taxation by the Non-Resident Income Tax when the aforementioned income is understood to be obtained in Spanish territory.

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

d. To determine the full fee, there are two liquidated bases to which different scales will be applied:

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

  • Dividends and other returns derived from participation in an entity's own funds.

  • Interest and other revenues obtained by the assignment of equity capitals to third parties.

  • Capital gains that become evident on the occasion of transfers of assets.

  The rates indicated on the following scale will be applied to this base in 2023 :

  Liquidable base of savings Up to euros	Full euro fee	Remainder of liquidated savings base 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 liquidable base euros	Applicable state rate Percentage
  Up to 600,0000 euros	24
  From 600,000.01 euros onwards	47

e. The differential fee will be the result of reducing the full Personal Income Tax fee by:

• Deductions for donations and withholdings and payments on account that have been made on the taxpayer's income (including the contributions paid on account of the Income Tax of non-residents).

  Withholdings and deposits on account as payments on account of the tax will be practiced, in the terms established by regulation, in accordance with the regulations of the Income Tax of Non-Residents for income obtained without the mediation of an establishment permanent.

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

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

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

  In the transfer of properties 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.

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

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