Non-resident income tax (Form 216) is regulated by Law 41/1998, 9 December. This law was published to regulate the taxation of non-residents uniformly due to the international relationships developing at that time requiring legislation of this type.
In the Spanish tax system, the following criteria have long been used to determine whether or not a person is subject to paying tax:
- Personal obligation. A person residing in Spain is taxed for the income they have in Spain and other countries.
- Real obligation. A person who has assets in Spain but does not reside in the country also needs to pay taxes.
Non-resident income tax: Definition and features
Non-resident income tax is a direct tax on income (in cash or in-kind) obtained in Spain by non-resident individuals or entities. In other words, this is where the real obligation described above comes into effect.
However, it’s important first to find out if any double taxation treaties apply to your situation in such cases. If there aren’t any, then the Non-Resident Income Tax Law should be applied. You can click on this link to find out more about the double taxation treaties Spain has signed.
Who needs to pay this tax?
According to Article 5 of the Non-Resident Income Tax Law, the following are liable for this tax:
- Individuals or entities, not resident in Spanish territory who obtain income there, unless they pay personal income tax (IRPF).
- Foreign individuals who reside in Spain due to their employment in diplomatic or consular offices.
- Entities in a system of income allocation have been incorporated outside of Spain but have a presence in Spanish territory.
Income obtained in Spain for non-resident income tax purposes
Income obtained in Spain is understood to be the following (as per Article 13 of the Non-Resident Income Tax Law):
- Income from economic activities or operations conducted through the use of a permanent establishment located in Spanish territory.
- Income from economic activities or operations conducted without a permanent establishment in Spanish territory, in the following cases:
- When the economic activities are carried out in Spanish territory.
- When it concerns the rendering of services used within Spanish territory.
- When stemming from the personal performance of artists and athletes in Spanish territory.
- Earnings from work:
- When they are the result of an activity carried out in Spanish territory.
- When concerning public payments made by the Spanish Administration.
- When concerning remunerations paid by individuals who engage in economic activities, in the performance of such activities.
- Pensions and similar benefits derived from employment in Spain.
- Payments from management directors or members of management boards, boards of directors or bodies representing an entity resident in Spain.
- Income from movable capital (dividends, royalties) and the income derived from movable assets in Spain.
The deadlines for Form 216 submissions are as follows:
- For quarterly declarations: The form must be submitted during the first 20 calendar days of April, July, October and January.
- For monthly returns applicable to large companies: The form must be submitted during the first 20 calendar days of the month following the relevant monthly declaration period.
To access the tax forms and, specifically, Form 216 for Non-Resident Income Tax, you can log on to the Tax Agency’s Electronic Office (Sede electrónica de la Agencia Tributaria), click on paperwork, taxes and fees (trámites, impuestos y tasas), and then Non-Resident Income Tax and Form 216 (Impuesto sobre la Renta de no Residentes y Modelo 216).