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Practical Handbook for Companies 2021


Until 1 January 1999, the Personal Income Tax Act and the Corporation Tax Act regulated two taxation regimes, the personal obligation for residents and the real obligation for non-residents.From that date, with the appearance of Law 41/1998, of 9 December 1998, regulating Non-Resident Income Tax, the real obligation was abolished and non-residents became taxpayers of Non-Resident Income Tax, although the distinction between taxpayers who obtain income in Spain through a permanent establishment and those who do not have a permanent establishment was maintained.

In the current regulation of the taxation of income obtained in Spain by non-resident income taxpayers through permanent establishment, contained in the revised text of the Non-Resident Income Tax Law (TRLIRNR), approved by Royal Legislative Decree 5/2004, of 5 March, the reference to the Corporate Income Tax Law is constant, so it has been considered convenient that these taxpayers use the same tax return forms as corporate income taxpayers .

On the other hand, in accordance with the current regulation of the income attribution system, the entities under the income attribution system constituted abroad with a presence in Spanish territory, i.e. those that carry out an economic activity in Spanish territory, have the status of taxpayers of the Non-Resident Income Tax, the taxable base being the part of the income obtained in Spanish territory that is attributable to the non-resident members of the entity.