Classes of taxpayers in income taxation
Taxpayers for Personal Income Tax and Corporation Tax for Income Tax for Non-Residents
Being a tax resident in Spain or abroad entails different tax obligations. Taxpayers who have tax residence in Spain are taxed on their worldwide income . On the other hand, those who reside abroad only pay taxes in Spain on the income that is considered obtained in Spanish territory. In both cases, the taxation must be understood without prejudice to the provisions of a Convention to avoid double taxation that is applicable.
Individuals who have their tax residence in Spanish territory will be taxpayers for Personal Income Tax . The tax period is the calendar year, without the change of residence implying the interruption of said period. Therefore, a natural person will be a resident or non-resident throughout the calendar year.
Legal persons or entities that have their residence in Spanish territory will be taxpayers for Corporate Tax .
Taxpayers for the Non-Resident Income Tax will be the non-resident individuals and entities in Spanish territory that obtain income therein.
The form of subjection to this tax depends on whether the income is obtained through a permanent establishment located in Spanish territory or without its mediation.
In the case of income obtained without a permanent establishment, in general, the tax 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 carried out in States with which there are regulations on mutual assistance regarding the exchange of tax information) may deduct, in the case of natural persons, 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 residing 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, the regulatory references made to States with which there is an effective exchange of tax information are understood to be carried out to States with which there are regulations on mutual assistance regarding the exchange of tax information) is lower than that applicable to the rest of non-resident taxpayers.