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Practical Handbook for Companies 2021

Persons obliged to withhold and make payments on account

According to the provisions of article 128.1 of the LIS are obliged to withhold or pay on account when they pay or pay income subject to withholding or payment on account of corporation tax:

  1. The legal persons and other entities, including communities of property and owners' associations and entities under the system of attribution of income.

  2. The natural persons in respect of income paid or payable by them in the course of their economic activities .

  3. Natural persons, legal entities and other entities not resident in Spanish territory, operating in Spain through permanent establishment.

  4. The representative designated in accordance with the provisions of Article 86.1 of the revised text of the Law on the regulation and supervision of private insurance, approved by Royal Legislative Decree 6/2004, acting on behalf of the insurance company operating under the freedom to provide services, in relation to operations carried out in Spain.

    With effect from 1-1-2016, the insurance companies domiciled in another Member State of the European Economic Area that operate in Spain under the freedom to provide services, in relation to transactions carried out in Spain, will be obliged to make a withholding or payment on account.