Purpose and general regime of the deduction

Object of the deduction

The purpose of this deduction is to prevent income obtained abroad by taxpayers of IRPF from being subject to this tax in Spain and also to a tax of a similar nature abroad.

General deduction regime

In cases where the taxpayer's income includes income or capital gains obtained and taxed abroad, the lower of the following two amounts will be deducted: ##

1. The effective amount paid abroad due to a tax of an identical or analogous nature to Personal Income Tax or to the Non-Resident Income Tax as a result of obtaining said income or capital gains.

2. The result of applying the average effective tax rate to the portion 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 tax by the taxable base. To this end, the type of tax applicable to general income and savings income must be differentiated, as appropriate. The tax rate thus determined will be expressed to two decimal places.

For the application of the deduction for international double taxation to income obtained abroad that forms part of the taxable savings base, the average effective rate (EER) corresponding to the taxable savings base (without any decomposition of this base) will be applied to the part of the taxable savings base obtained abroad, differentiating, in relation to the latter, depending on whether the income obtained abroad is a return or a capital gain.

Instead, the average effective rate (EER) 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 income and profits.