Tax rate for permanent establishments and supplementary taxation

Brexit consequences for complementary taxation

The IRNR contains specific provisions applicable to residents of other Member States of the European Union, provisions that will no longer apply to taxpayers resident in the United Kingdom once the transition period ends, as of January 1, 2021. Among them, in the cases of income obtained through a permanent establishment, it is worth mentioning the one relating to complementary taxation (article 19 TRLIRNR ).

Additional taxation is payable by permanent establishments of non-resident entities when they transfer income abroad.

Additional taxation will not be applicable when it concerns income obtained in Spanish territory through permanent establishments by entities that have their tax residence in another Member State of the European Union, unless it is a country or territory considered a non-cooperative jurisdiction, or in a State that has signed an agreement with Spain to avoid double taxation, in which nothing else is expressly established, provided that there is reciprocal treatment.

There is a double taxation agreement in place with the United Kingdom, which is not affected by Brexit and remains applicable. This agreement does not contemplate this type of additional taxation, so additional taxation would still not be applicable to entities resident in the United Kingdom via an agreement.