Withholdings in income tax for non-residents without a permanent establishment

Income exempt from the obligation to withhold tax at source

As a general rule, the following apply:

• Income exempt by virtue of what is set out in the law for non-resident income tax. However, there will be an obligation to withhold tax on the following exempt income in accordance with LIRNR :

  • the exemption relating to dividends obtained by equivalent pension funds EU .

  • the exemption for dividends earned by unit trust institutions.

• Income exempt by virtue of what is set out in an Agreement for avoiding double taxation.

• Income paid to payers of this tax without permanent establishment when payment of the tax or the origin of the exemption is accredited.

• Income that establishes capital gains. However, an obligation shall exist to withhold tax from the following income:

  • prizes from participation in games, competitions, raffles or random combinations.

  • income obtained on the transfer of buildings located in Spanish territory.

  • Income obtained on the transfer of shares or holdings that represent the capital of Unit Trust Institutions.

  • prizes subject to the Special tax on specific lotteries and betting.