Option of being taxed under Personal Income Tax
Regulations: Article 46 IRNR Act; Articles 21 to 24 of the IRNR Regulation
Payers of Non-Residents' Income Tax (IRNR):
Who are individuals.
That prove that they are residents in another Member State of the European Union (EU) (Annex V), except residents in countries or territories legally classified as tax havens (with effect from 11 July 2021, references made to tax havens are understood to be made to the definition of non-cooperative jurisdiction. See Appendix IV) or in a Member State of the European Economic Area (EEA) with which there is an effective exchange of information tax (effective from 11 July 2021, the regulatory references made to States with which there is an effective exchange of tax information those made to States with which there are regulations on mutual assistance in the area of tax information exchange in the terms set out in Act 58 / 2003, of 17 December, General Tax, applicable. See Appendix V).
That prove that at least 75% of all of its income in the tax period is constituted by the sum of the earned income and economic activities obtained during the same in Spanish territory, or that prove that the income obtained during the financial year in Spain has been less than 90% of the minimum personal and family allowance that would have been paid to it in accordance with its personal and family circumstances if it has been a resident in Spain, and that the income obtained outside Spain has also been lower than this minimum.
when these incomes have actually been subject to IRNR.
They can request the application of this optional regime, whose purpose is for effective taxation in Spain to be calculated according to the personal Income Tax (IRPF) rules, but without losing their status as payers of IRNR.
Order HAP/2274/2015 of 19 November (Official State Gazette of 24 November) approves the application form for the optional regime and determines the place, form and deadline for its submission.
Once the application has been submitted and the tax administration has accredited that it complies with the conditions that determine its application, taking into account all the incomes obtained by the taxpayer in the tax period and their personal and family circumstances, and following the settlement scheme of Personal Income Tax, it 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 a lower amount than the amounts paid during the tax period by the non-resident taxpayer as IRNR on the incomes obtained in Spanish territory, the excess will be refunded.