Taxation of Spanish-sourced student grants to be taken abroad

As a general rule, grant holders residents in Spain who travel abroad on account of a grant, given that their absence will be sporadic or temporary, will continue to be considered tax residents in Spain and, therefore, unless they accredit their residence in the other country, they maintain their residence in Spain and will be subject to Personal Income Tax (IRPF) regulations.

When grant holders acquire tax residence in the country to which they have travelled and they accredit such status by means of a residency certificate issued by the competent tax authority in that country, they will, in principle, be considered non-resident and be subject to Non-resident Income Tax (IRNR) regulations.

Internal legislation: Grants are be classified as earnings from employment. Agreement: the article relative to earnings from dependent employment is applied, even when said earnings are paid by Public Administrations. In the receiving country, the grant may be exempt under the terms of the article of the Agreement relating to students.

Resident grant holder: is taxed in Spain according to the Personal Income Tax regulations. Article 7j) LIRPF contains certain exemptions applicable to scholarships.

Non-resident grant holder: according to Non-resident Income Tax regulations, the grant may not be subject to taxation in Spain as is does not correspond to an activity carried out in Spanish territory, and it may be subject to taxation if the payer is the Spanish Administration. In addition, the exemptions set out in articles 141b) LIRNR and 7j) LIRPF may be applicable. Where an Agreement exists and is applied, he or she shall be exempt in Spain by virtue of carrying out the activity in another country.

However, the in cases affected by the High Court Sentences, no. 4305/2017, 4306/2017, 4307/2017 and 334/2018, the interpretative criteria established in the corresponding ruling will be applied.