Classes of taxpayers in income taxation

Being a tax resident in Spain or abroad entails different tax obligations. Taxpayers who have tax residency in Spain pay taxes on their worldwide income . However, those who reside abroad only pay taxes in Spain on income considered to have been obtained in Spanish territory. In both cases, taxation must be understood without prejudice to the provisions of an applicable double taxation agreement.

Those who are tax residents in Spain will be taxpayers for the Personal Income Tax . The tax period is the calendar year, and a change of residence does not imply the interruption of said period. Therefore, a natural person will be a resident or non-resident throughout the calendar year.

The following will be taxpayers for the Corporate Tax Legal persons or entities that have their residence in Spanish territory.

The individuals and entities that not resident in Spanish territory and who obtain income there will be taxpayers for the Non-Resident Income Tax :

The form of subjection to this tax depends on whether the income is obtained through a permanent establishment located in Spanish territory or without such mediation.

In the case of income obtained without a permanent establishment, in general, the taxable base is constituted by the full amount accrued, without deducting any expenses.

However, taxpayers resident in another Member State of the European Union or the European Economic Area with which there is an 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 exchange of tax information) may deduct, in the case of individuals, the expenses provided for in the Personal Income Tax Law, and in the case of entities, those provided for in the Corporate Tax Law, provided that it is proven that they are directly related to the income obtained in Spain and that they have a direct and inseparable link with the activity carried out in Spain. 

Likewise, the general tax rate applicable to taxpayers resident in another Member State of the European Union or the European Economic Area with which there is an 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 exchange of tax information) is lower than that applicable to other non-resident taxpayers.