Tax rate for permanent establishments and supplementary taxation
Applicable tax rate and nature of supplementary taxation
Consequences of Brexit on complementary taxation
IRNR contemplates specific provisions applicable to residents of other Member States of the European Union, provisions that will no longer be applicable to taxpayers resident in the United Kingdom once the transitional period has ended, as of from January 1, 2021. Among them, in the cases of income obtained through a permanent establishment, it is worth highlighting that relating to complementary taxation (article 19 TRLIRNR ).
The complementary tax is payable to permanent establishments of non-resident entities when they transfer income abroad.
The complementary tax will not be applicable in the case of 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, as long as there is reciprocal treatment.
With the United Kingdom there is an agreement to avoid double taxation, which is not affected by Brexit and continues to be applicable. This agreement does not contemplate this type of complementary taxation, so the complementary taxation would still not be applicable to entities resident in the United Kingdom via the agreement.