There are two types of tax in the Spanish tax system:
Direct taxation. Applied to income and assets:
Personal income tax (IRP by its Spanish name).
Non-residents’ income tax (IRNR by its Spanish name).
Corporate tax (IS by its Spanish name).
Inheritance and donations tax.
Wealth tax.
Indirect taxation. Levied on goods and services and the transfer of goods and rights in general:
Value added tax (VAT, or IVA in Spanish).
Special taxes (IIEE by its Spanish name).
Insurance premiums tax.
Wealth transfer tax (ITP by its Spanish name) and stamp duty.
Foreign researchers who come to Spain for a limited period of time will probably have to pay IRPF or IRNR (both income tax), depending on their residence status, VAT when making purchases, IIEE (special taxes) and, in rare cases, Wealth Tax, ITP (wealth transfer tax), etc.
Table. Personal income tax (IRPF) and Non-residents' income tax (IRNR)
| Personal income tax (IRPF) and Non-residents’ income tax (IRNR) | These taxes are applied to income earned by individuals depending on their residence status. |
| Residence | Individuals must pay Personal Income Tax (IRPF) or Non-Residents’ Income Tax (IRNR) depending on whether or not they are residents of Spain. Individuals are considered to reside regularly in Spain when they remain in the country for over 183 days (6 months) during the calendar year. Sporadic absences are taken into account when determining a presence in Spain, unless they certify their residence for tax purposes in another country. Nevertheless, to settle the dispute about dual residency other factors are also included as for example, the family's place of residence, the State in which the closest personal and economic ties are maintained or the country of origin or where they normally work. If the individual is considered to live in Spain for tax purposes, they are required, in principle, to pay income tax on all income anywhere in the world. It is therefore a good idea to seek advice on you tax status when you come to work or research in Spain. In Spain, tax is levied per calendar year (from 1st January to 31st December) and the condition of resident or non-resident will apply to each one-year period. |
Special IRNR tax plan | Natural persons (in this case researchers) who establish residence for tax purposes in Spain as a result of their travels to this country may choose to pay IRNR, maintaining their IRPF taxpayer status, for the tax year in which they move their residence and the following five tax periods, provided that a series some requirements are met:
NB: Any researchers opting for this tax system have limited tax liability for wealth tax. It is possible to apply to withdraw or be exempted from this regime (using Model 149). |
Certification of residence for tax purposes
A person can have a residence permit or administrative residence in a country without being considered a resident for tax purposes. To be a resident for tax purposes in a particular country (in this case, Spain), the person must be subject to taxation on income earned anywhere in the world. Residence for tax purposes is accredited by a certificate issued by the country's tax authority. These certificates are valid for one year.
Agreements to avoid double taxation
If the researcher is a resident of a country with which Spain has signed an Agreement to avoid double taxation, the terms of the agreement will apply, since, in some cases, the tax is lower, and in others, under certain circumstances, the income cannot be taxed in Spain. In these cases, the non-resident researcher must certify residence in the country with which Spain has signed the agreement by means of a residence certificate issued by that country's tax authorities.
To find out what types of agreements Spain has signed, and with which countries, visit the following websites: Spanish Ministry of Finance and Public Administrations (http://www.minhafp.gob.es/es-ES/Normativa%20y%20doctrina/Normativa/CDI/Paginas/cdi.aspx), only available in Spanish; Tax Office (http://www.agenciatributaria.es), in the section "Fiscalidad de no residentes" (Non-resident tax status) (available in Spanish and English).
Spain has signed 102 agreements to date to avoid double taxation, 93 of which are in force. The other 9 are at various stages of being processed (Azerbaijan, Bahrain, Belarus, Cape Verde, Qatar, Montenegro, Namibia, Peru and Syria). Agreements with Austria, Belgium, Canada, the United States of America, Finland, India, Mexico, the United Kingdom and Romania have been renegotiated.
Deductions for international double taxation
If the foreign researcher residing in Spain is required to pay IRPF tax and has had income (yields or capital gains) outside of Spain, an international double taxation deduction may be applied to keep the income earned abroad from being subject to the IRPF in Spain and to a similar tax abroad.
Special plan for researchers (taxpaying) with residency in other EU Member States
Foreign researchers who are IRNR taxpayers and certify their residency in another EU country, except countries and territories officially enshrined in legislation as tax havens, when at least 75% of their income for the tax period is the sum of employment earnings and economic activities during that period in Spain (and IRNR taxes have actually been paid on those earnings), may apply for a special plan so that their taxes in Spain are calculated according to the IRPF rules without losing their IRNR taxpayer status.
Since 1 January 2015, they may also opt to benefit from this special scheme if the income received in Spain during the financial year was less than 90% of the minimum personal and family allowance they would have been entitled to in accordance with their personal and family circumstances, had they been resident in Spain, provided that IRNR taxes have actually been paid on those earnings during the period and that the income obtained outside Spain was less than said minimum allowance.
Tax-exempt grants:
If the researcher is an IRPF taxpayer, the grant is considered employment income and is subject to the tax. However, pursuant to relevant legislation57, the following grants are exempt from tax:
State grants.
Grants awarded by certain not-for-profit bodies58 pin order to undertake regulated studies in Spain or abroad, at all levels and degrees of the educational system. The amount that is exempt will cover the costs of matriculation, or amounts paid for an equivalent concept in order to take the course, and insurance for bodily injuries and medical care the grant holder – and, when applicable, his/her spouse or children – should require, provided they do not have Social Security cover.
Public grants and those given by not-for-profit entities for research included in the provisions of Royal Degree 63/2006, dated 27 January, which approves the Statute of Research Personnel in Training, as well as those given by entities whose purpose is research to civil servants and other employees of Public Administrations and to university teaching and research staff, are also exempt. Under no circumstances will amounts received under a work contract be considered grants.
However, if the researcher is an IRNR taxpayer, the grants are considered to be income from work earned in Spain and are therefore subject to the tax. This is the case providing that this income is the result of personal activity carried out on Spanish soil or public payments received from the Spanish Government, unless work is performed entirely abroad and the income is subject to personal taxation in another country.
Although the grants are subject to IRNR, they may be exempt (according to IRNR regulations), in the following cases:
Grants that are exempt pursuant to IRPF regulations.
Grants and other amounts received by individuals, paid by Public Administrations by virtue of international agreements for cultural, educational and scientific cooperation or by virtue of the annual international cooperation plan drafted by the Council of Ministers.