1. Incomes earned for work performed abroad (Article 7p of the IRPF Law)
Incomes earned for work performed abroad are excepted, up to a maximum limit of 60.100 Euros per year if the following two conditions are fulfilled:
- those work which is performed for a company or entity who has no resident in Spain, located abroad
- in the area where the work is carried out, there is an identical or similar tax applied to IPRF and there isn´t a country or territory involved which is considered as tax haven.
- Compatibility of the exemption for work performed abroad with the tax allowances for travel expenses and normal living and accommodation expenses.
- The exemption only applies to the remuneration earned during the days of stay abroad.
- To quantify the exempted income they should be considered accrued income during the days on which they have been displaced abroad. For this, a proportional criterion can be adopted, considering the denominator of the total number of days in a year, not working days.
This exemption does not apply to all earned incomes, only for those derived from an employment relationship. It does not apply to managers of companies because it doesn´t exist an employment relationship as an employee.
2. Beckham Law
Natural persons who acquire tax resident in Spain, as a result of moving to Spanish territory, may opt to be taxed under the income tax for non-residents, maintaining the condition of contributing to the IPRF.
It can be opted during the tax period in which the change of residence is effected and during the following five tax periods.
Option for paying tax of non-resident income
- the exercise of the option to pay for this special scheme must be realized through a communication addressed of the tax authorities. The deadline for communication is 6 months.
Opt for the non-resident income tax it can be supposed a tax rate of 24 % for the first 600.000. From this amount, the rate is 47 % in 2015 and will be 45% in 2016.
In case of not taxed at the same, the marginal tax rate would be approximately 47%, depending on the autonomous region.
If you think your company can be an either situations we believe it would be useful, in view of the complexity of the regulation, to contact our experts so we can analyze the situation from the fiscal point of view and the labour relations.