Option of being taxed under Personal Income Tax

Regulations: Article 46 Law IRNR ; Articles 21 to 24 of the IRNR Regulation

Payers of Non-Residents' Income Tax (IRNR):

• Who are individuals.

• Who prove to be residents in another Member State of the European Union (EU) ( Annex V ) except residents in countries or territories qualified by regulation as tax havens (with effect from July 11, 2021 , references made to tax havens are understood to be made to the definition of non-cooperative jurisdiction. See Annex IV ) or in a Member State of the European Economic Area (EEA) with which there is an effective exchange of tax information (with effect from July 11, 2021, regulatory references made to States with which there is an effective exchange of tax information are understood to be made to States with which there are regulations on mutual assistance in matters of the exchange of tax information in the terms provided for in Law 58/2003, of December 17, General Tax, which is applicable). See Annex V ).

• They must prove that at least 75% of their total income in the tax period is made up of the sum of income from work and economic activities obtained during the same period in Spanish territory, or that they must prove that the income obtained during the year in Spain was less than 90% of the personal and family minimum that would have corresponded to them according to their personal and family circumstances if they had been resident in Spain and that the income obtained outside of Spain was also less than said minimum.

• when these incomes have actually been subject to IRNR.

They may request the application of this optional regime, the purpose of which is that the effective taxation in Spain is calculated based on the rules of the Personal Income Tax (IRPF), but without losing their status as taxpayers for the IRNR.

Order HAP /2274/2015, of November 19 ( BOE of November 24) approves the application model for the optional regime and determines the place, form and deadline for its presentation.

Once the application has been made and compliance with the conditions determining its application has been accredited, the Tax Authority, taking into account all the income obtained by the taxpayer in the tax period and his/her personal and family circumstances, and following the liquidation scheme of IRPF , will determine the corresponding average tax rate.

The resulting average tax rate will be applied on the part of the tax base corresponding to the incomes obtained in Spanish territory.

If the above result shows an amount lower than the amounts paid during the tax period by the non-resident taxpayer in the form of IRNR on income obtained in Spanish territory, the excess will be returned.