23 Abr Personal Income Tax (IRNR) and 210 form
Individuals residing in spanish territory are subject to taxation in Spain by the Personal Income Tax for all of their income worldwide, that is, regardless of the place where they obtain the income and the residence of the payer.
The opposite occurs with individuals and entities that do not reside in spanish territory, who are subject to taxation in Spain for income from spanish sources through the Non-Resident Income Tax. It is declared and self-liquidated with form 210, as long as it concerns income obtained by non-residents without the mediation of a permanent establishment in spanish territory.
Non-residents who obtain income through a permanent establishment located in spanish territory must declare the income attributable to said permanent establishment through 200 form (companies or individual companies that I feel are residents abroad carry out their activity in Spain through an establishment permanently located in spanish territory).
In this article we will focus on how spanish source income obtained by non-resident individuals and entities without the mediation of a permanent establishment in spanish territory or 210 form must be declared.
Who has to file form 210?
In general, form 210 only has to be submitted by the person or entity that does not reside in spanish territory and obtains income from a spanish source without the mediation of a permanent establishment located in spanish territory, provided that such income has not been subject to prior withholding. in Spain, even if they are declarations with zero quota.
In the case of income subject to prior withholding in Spain, in general, there will be no obligation to present form 210, since prior withholding excludes the obligation to declare such income. Although, there are some exceptions in which it is required:
- The capital gains that derive from the transfer of real estate located in spanish territory must be declared in any case through form 210, even when the acquirer has retained the seller and paid 3% of the agreed sale price to the Tax Agency. on account of the Non-Resident Income Tax.
- The capital gains that derive from the reimbursement of the spanish investment funds when the withholding applied is less than the amount of the tax debt (note that if the non-resident has acquired shares in the same investment fund through various marketers, the marketer to through which the reimbursement is made will apply the FIFO criterion for the purposes of withholding (those acquired in the first place are understood to be reimbursed), but it will only take into account the shares that in the same fund have been acquired by the same holder with the intermediation of said trader, and the taxpayer will be obliged to calculate the capital gain and pay the corresponding tax by applying the FIFO criterion to all the shares he has in the same investment fund, even when they have been acquired through different marketers).
- To request the return of the excess withholding borne in Spain when the taxpayer is resident in a country that has signed an agreement to avoid double taxation with Spain and the withholding borne in Spain has been higher than the tax limit established in the respective agreement.
In accordance with the criteria established in the Non-Resident Income Tax, the following are considered to be obtained in spanish territory:
- Income from economic activities or exploitations carried out through a permanent establishment located in spanish territory (they are declared in Form 200) or without the mediation of a permanent establishment in spanish territory (they are those that are declared in form 210) when, in the latter case, in the case of activities carried out in spanish territory, of provision of services used in spanish territory or when they derive, directly or indirectly from the personal performance in Spanish territory of artists or athletes.
- Earnings from work when:
- They derive, directly or indirectly, from a personal activity carried out in Spanish territory.
- In the case of public remuneration paid by the spanish administration, except when the work is provided entirely abroad and such income is subject to a personal tax abroad.
- In the case of remunerations paid by persons, entities or permanent establishments located in spanish territory or by reason of a job carried out on board a ship or aircraft in international traffic unless, as in the previous case, the work is provided entirely abroad and such income is subject to a personal tax abroad.
- Pensions and other similar benefits, when they derive from a job provided in spanish territory or when they are paid by a person or entity residing in spanish territory or by a permanent establishment located in spanish territory.
- The remuneration of the administrators and members of the boards of directors of an entity resident in Spain.
- The following income from movable capital:
- Dividends from entities resident in Spain.
- Interest and other income derived from the transfer to third parties of own capital paid by persons or entities resident in spanish territory or by permanent establishments located there or that pay capital benefits used in spanish territory.
- Royalties or royalties paid by persons or entities resident in spanish territory or by permanent establishments located there, or that are used in spanish territory.
- Other income from movable capital is paid in the exercise of their activities by individuals who carry out economic activities, or entities resident in spanish territory or by permanent establishments located there.
- The income derived from real estate located in spanish territory or from rights relating thereto.
- Income imputed to individuals who own urban real estate located in spanish territory that are not involved in economic activities.
- The following capital gains:
- Those that derive from securities issued by persons or entities resident in spanish territory.
- Those that derive from other movable property other than the values located in spanish territory or from rights that must be fulfilled or exercised in spanish territory.
- Those that derive, directly or indirectly, from real estate located in spanish territory or from rights related to them (including capital gains derived from interests in an entity, resident or not, whose assets are mainly constituted, directly or indirect, for real estate located in spanish territory).
- The capital gains that derive from the incorporation into the patrimony of the taxpayer of assets located in spanish territory or of rights that must be exercised or fulfilled in spanish territory, even when they do not derive from a prior transfer such as gambling winnings.
How much do you pay for IRNR?
Persons or entities not resident in spanish territory that obtain income from spanish sources without the mediation of a permanent establishment in spanish territory are subject to taxation of gross income without deduction of expenses, without prejudice to the existence of certain exemptions.
As an exception, in this case the deduction of the expenses of personnel hired in spanish territory, supplies of materials for their incorporation or works or works carried out in spanish territory and supplies consumed in spanish territory is allowed, provided that the three cases comply with the regulatory requirements obtained for this purpose.
The tax quota is the result of applying the following tax rates to the income thus calculated:
- In general, 24% (19% for residents in another Member State of the European Union or the European Economic Area with which there is an effective exchange of information).
- In the case of pensions and the like, applying the following scale:
- 8% (up to 12,000 euros)
- 30% (12,000 to 18,700 euros)
- 40% (from 18,700 euros)
- 19% for income from movable capital (dividends and interest) and for capital gains.
From the tax quota resulting from the application of these rates, only the withholdings and payments on account practiced, if any, are deductible.
It is important to note that negative income is not subject to compensation in Spain for the purposes of Non-Resident Income Tax (where appropriate, they will be compensable in the taxpayer’s country of residence in accordance with what its specific regulations establish).
Deadlines: when do you have to file the 210 model?
Non-residents in spanish territory who obtain income from spanish source without the mediation of establishment are subject to tax for each accrual of income from spanish source (there is no tax period) and are required to present a model 210 for each type of income separately. (You cannot mix, for example, dividends with earned income).
The presentation period varies according to the type of income:
- Income imputed by urban real estate available to its holders: The term of presentation and entry will be the calendar year following the date of accrual (December 31 of each year).
- Income derived from the transfer of real estate: self-assessments of income derived from real estate transfers will be presented, regardless of the result of the self-assessment, within three months once the period of one month has elapsed from the date of transmission (accrual date) of the real estate.
- When the return is to be paid: in the first 20 calendar days of the months of April, July, October and January (or until the 15th if the payment is to be domiciled) in relation to the income accrued in the previous calendar quarter .
- Self-assessments with zero installment: the submission period will be from January 1 to 20 of the year following the accrual of declared income.
- Self-assessments with results to be returned: they can be submitted from February 1 of the year following the accrual and within a period of 4 years from the end of the declaration period and income of the withholding.
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