Special regime for impatriates art. 93 Personal Income Tax Law

Regulations: Article 93 and Transitional Provision 17 Law Personal Income Tax ; articles 113 to 120 Personal Income Tax Regulations; Order HAP /2783/2015, of December 21, which approves models 151 and 149 and Order HFP /1338/2023, of December 13 December, by which the new models 151 and 149 are approved.

(With effect from January 1, 2023, article 93 of the Personal Income Tax Law, which regulates the special tax regime applicable to workers, professionals, entrepreneurs and investors relocated to Spanish territory, has been modified by the Third Final Provision of Law 28/2022, of December 21, to promote the ecosystem of emerging companies (BOE of December 22).This modification reduces the previous period of non-residence in Spain to five years and expands the possibility of opting for the special regime to new groups of people, teleworkers, entrepreneurs and professionals, as well as members of their family, under certain conditions.  Consequently, in the new regulation of the special regime there will be two figures, a main taxpayer and other taxpayers associated with him, coming from his family nucleus, linked to the main taxpayer in terms of the periods of application of the regime)

Natural persons who acquire tax residence in Spain as a result of moving to Spanish territory may choose to pay non-resident income tax, maintaining their status as taxpayers for non-resident income tax. Individuals (IRPF), during the tax period in which the change of residence is made and during the following five tax periods, when the following conditions are met:

• Until December 31, 2022:

  1. That they have not been residents in Spain for the ten tax periods prior to the period in which they transferred to Spain.

  2. That the transfer to Spain took place as a result of any of the following circumstances:

     1. As a consequence of an employment contract, with the exception of the special employment relationship of professional athletes regulated by Royal Decree 1006/1985, of June 26.

        This condition will be deemed to have been met when an employment relationship, ordinary or special, different from that previously indicated, or statutory, begins with an employer in Spain, or when the posting is ordered by the employer and there is a posting letter from the employer.

     2. As a consequence of the acquisition of the status of administrator of an entity in whose capital it does not participate or, otherwise, when the participation in the same does not determine the consideration of a related entity in the terms provided for in article 18 of the Corporate Tax Law.

  3. That he does not obtain income that would be classified as obtained through a EP located in Spanish territory.

• Since January 1, 2023 (the new regulation of the regime applies to taxpayers who acquire their tax residence in Spain from 2023 and includes taxpayers who acquire their tax residence in Spain in the year 2023 as a result of a trip to Spanish territory in the second half of 2022):

  1. That they have not been residents in Spain during the five tax periods prior to the one in which their movement to Spanish territory occurs.

  2. That the displacement to Spanish territory occurs, either in the first year of application of the regime or in the previous year, as a consequence of any of the following circumstances:

     1. As a consequence of an employment contract, with the exception of the special employment relationship of professional athletes regulated by Royal Decree 1006/1985, of June 26, which regulates the special employment relationship of professional athletes.

        This condition will be deemed to have been met when an employment relationship, ordinary or special, different from the one previously indicated, or statutory, begins with an employer in Spain. Likewise, this condition will be deemed to have been met when the posting is ordered by the employer and there is a posting letter from the employer or when, without being ordered by the employer, the work activity is provided remotely, through the exclusive use of computer media and systems. , telematics and telecommunications. In particular, this circumstance will be deemed to have been met in the case of employed workers who have the visa for international teleworking provided for in Law 14/2013, of September 27, on support for entrepreneurs and their internationalization.

     2. As a consequence of acquiring the status of administrator of an entity. In the event that the entity is considered a property entity in the terms provided for in article 5, section 2, of the Corporate Tax Law, the administrator may not have a participation in said entity that determines its consideration as a related entity in the terms provided for in article 18 of Law 27/2014, of November 27, on Corporate Tax.

     3. As a consequence of the performance in Spain of an economic activity classified as an entrepreneurial activity , in accordance with the procedure described in article 70 of Law 14/2013, of September 27.

     4. As a consequence of the performance in Spain of an economic activity by a highly qualified professional who provides services to emerging companies within the meaning of article 3 of Law 28/2022, of December 21, on the promotion of the ecosystem of emerging companies , or that carries out training, research, development and innovation activities, receiving remuneration for this which together represent more than 40% of all business, professional and personal work income.

  3. That they do not obtain income that would be classified as obtained through a permanent establishment located in Spanish territory, except in the case provided for in letter b).3rd and 4th of this section.

     The spouse of the taxpayer referred to in the previous section and their children, under twenty-five years of age, may also choose to pay Non-Resident Income Tax, maintaining their status as taxpayers for the Personal Income Tax. or whatever their age in case of disability, or in the event of non-existence of marriage, their parent, provided that the following conditions are met:

     1. That they travel to Spanish territory with the taxpayer referred to in the previous section or at a later time, provided that the first tax period in which the special regime applies to them has not ended.

     2. That they acquire their tax residence in Spain.

     3. That they meet the conditions referred to in letters a) and c) of the previous section.

     4. That the sum of the taxable bases of the taxpayers in each of the tax periods in which this special regime is applicable is lower than the taxable base of the taxpayer referred to in the previous section.

        The special regime will be applicable during the successive tax periods in which, if such conditions are met, it will also apply to the taxpayer provided for in the previous section.

Taxpayers who take advantage of this option are not considered residents for the purposes of the application of a Double Taxation Agreement as they are subject to taxation exclusively on the income they obtain from sources located in Spain.

The option , waiver or exclusion from the special regime, is done using form 149 . The documentation provided for in article 119 of the Personal Income Tax Regulations must be attached to the communication of the option.

From December 16, 2023, the date of entry into force of Order HFP/1338/2023, of December 13, the new model 149, approved in the aforementioned Order, replaces the previous one approved in Order HAP/2783/2015, of December 21.

Taxpayers who opt for the Special Regime must submit a special personal income tax declaration in form 151 , adapted to the content of the regime.

The new model 151 of «Personal Income Tax Declaration. Special regime applicable to workers, professionals, entrepreneurs and investors displaced to Spanish territory" approved in Order HPF/1338/2023, of December 13, will be used for the first time for the presentation of the declaration corresponding to the 2023 tax period to be presented in 2024. The declarations corresponding to tax periods prior to 2023 will continue to use model 151 approved in Order HAP/2783/2015, of December 21.

Withholdings and payment on account

Withholdings and payments on account for payments on account of Personal Income Tax will be carried out in accordance with the regulations of the Income Tax of Non-Residents.

However, the percentage of withholding or deposit on account of work income will be 24%. When the remuneration paid by the same payer of work income during the calendar year exceeds 600,000 euros, the withholding percentage applicable to the excess will be the one in force according to the year of accrual (see table).