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Where does a Spanish worker who resides abroad pay tax? The general criterion indicates that at the place of residence. But this taxation can vary depending on a number of factors, including your country of origin, the country where you work, double taxation agreements between countries and the length of your stay abroad
We remind you that a Spanish professional who works abroad must, in principle, be taxed in Spain regardless of where his income was generated, as long as the worker has his habitual residence in Spain.
According to the Spanish Tax Agency, a natural person is considered to have habitual residence in Spain when any of the following circumstances occur:
- That he stays in Spain for more than 183 days during the calendar year.
- To determine the period of stay, temporary stays in Spain that are a consequence of the obligations contracted in cultural or humanitarian collaboration agreements, free of charge, with the Spanish public administrations are not counted.
- That the main nucleus or base of economic activities or interests, directly or indirectly, is located in Spain.
In any other case, and as long as you have a certificate of residence in another country, you will not be taxed in Spain but in the country referred to.
Double taxation: agreements between countries
It may be the case that a worker carries out his professional work in more than one country throughout the year and has residence in two different countries. In circumstances like this, there are mechanisms to avoid falling into the so-called double taxation.
Double taxation is a situation that occurs when someone is taxed for the same taxable event in two countries at the same time. To prevent the professional from being taxed twice, most countries have agreements that regulate these situations.
The exemption from the 7p
The Personal Income Tax Law speaks in point 7p of the exemptions to which Spanish residents who work abroad are entitled. The LIRPF allows an exemption of up to 60,100 euros per year for income from work carried out abroad.
To be able to access this privilege, the following requirements must be met:
- That the work is carried out for a company not resident in Spain or for a permanent establishment based abroad.
- The taxpayer must be considered tax resident in Spain.
- That the services provided are physically carried out abroad.
- That wherever the work is carried out there is a tax of an identical or similar nature to the Spanish personal income tax and that it is not a tax haven
Tax on the income of non-residents in Spain
The tax on the income of non-residents, IRNR, is a tax established in Spain, of a direct nature, which taxes the income obtained in Spanish territory by natural persons and non-resident entities.
According to the Tax Agency, the two traditional criteria by which an income can be considered to have been obtained in Spanish territory are the criteria of territoriality and payment. However, in accordance with the regulations in force from January 1, 2003, the payment criterion is only applicable with respect to the incomes for which it is expressly established.
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