Spanish tax law · Non-Resident Income Tax · 04

Income without a permanent establishment

Chapter IV, articles 24 to 33: how the base is computed when there is no permanent establishment, the rates, the only two deductions allowed, when the tax accrues, who must file, and who has to withhold.

Unofficial English translation from the Spanish by Voixa Consultors S.L. Alexander Baranov is responsible for the translation. Source: Real Decreto Legislativo 5/2004, consolidated text, BOE-A-2004-4527 ↗. Check wording, rates, dates and legal effect against the Spanish original before relying on this reading. Source snapshot: 4 November 2026.

The regime most non-residents actually meet

Without a permanent establishment the tax is charged on each receipt as it arises, usually on the gross amount, at a flat rate, with almost nothing deductible. Article 15.1 on an earlier page already said there is no offsetting between items. The two things worth reading closely here are article 24.6, which gives EU and EEA residents a deduction nobody else gets, and article 25.2, which turns the buyer of a Spanish property into a tax collector.

Article 24. Tax base

1. As a general rule, the tax base corresponding to income obtained by taxpayers for this tax without a permanent establishment shall consist of its full amount, determined in accordance with the rules of the consolidated text of the Personal Income Tax Act, approved by Royal Legislative Decree 3/2004 of 5 March, and neither the multiplier percentages of article 23.1 of that consolidated text nor the reductions shall apply.

2. In the case of supplies of services, technical assistance, installation or assembly works arising from engineering contracts and, in general, economic activities or operations carried on in Spain without a permanent establishment, the tax base shall be equal to the difference between the full income and the expenses of personnel, of supply of materials incorporated into the works or jobs, and of utilities, on the conditions laid down by regulation.

3. The tax base corresponding to income derived from reinsurance operations shall consist of the amounts of the premiums ceded, by way of reinsurance, to the non-resident reinsurer.

4. The tax base corresponding to capital gains shall be determined by applying, to each change in assets that occurs, the rules laid down in Section 4 of Chapter II of Title III, except article 33.2, and in Section 6 of Title X, except the second sub-paragraph of article 94.1.a), of Law 35/2006 of 28 November on Personal Income Tax.

In the case of non-resident entities, where the capital gain arises from an acquisition free of charge, its amount shall be the market value of the item acquired.

In the case of capital gains referred to in article 13.1.i).3 of this Act arising from the transfer of rights or interests in entities resident in countries or territories with which there is no effective exchange of tax information in accordance with paragraph 3 of the first additional provision of the Prevention of Tax Fraud Act, the transfer value shall be determined by reference, proportionally, to the market value at the time of transfer of the immovable property situated in Spanish territory, or of the rights of enjoyment over that property.

Where the taxpayer has been taxed under Personal Income Tax on capital gains on a change of residence, in accordance with article 95 bis of the Personal Income Tax Act, the acquisition value to be taken for calculating the capital gain on the transfer shall be the market value of the shares or interests that was taken into account in determining the capital gain under that article.

5. In the case of non-resident individuals, the income imputed on immovable property situated in Spanish territory shall be determined in accordance with article 87 of the consolidated text of the Personal Income Tax Act, approved by Royal Legislative Decree 3/2004 of 5 March.

6. In the case of taxpayers resident in another Member State of the European Union, the following special rules shall apply:

1. For the determination of the tax base corresponding to income obtained without a permanent establishment, the following may be deducted:

a) In the case of individuals, the expenses provided for in Law 35/2006 of 28 November on Personal Income Tax, provided that the taxpayer shows that they are directly related to the income obtained in Spain and have a direct and indissociable economic link with the activity carried on in Spain.

b) In the case of entities, the expenses deductible under Law 27/2014 of 27 November on Corporate Income Tax, provided that the taxpayer shows that they are directly related to the income obtained in Spain and have a direct and indissociable economic link with the activity carried on in Spain.

2. The tax base corresponding to capital gains shall be determined by applying, to each change in assets that occurs, the rules laid down in Section 4 of Chapter II of Title III and in Section 6 of Title X, except the second sub-paragraph of article 94.1.a), of Law 35/2006 of 28 November on Personal Income Tax.

The provisions of this paragraph shall apply equally to taxpayers resident in a Member State of the European Economic Area with which there is an effective exchange of tax information on the terms provided for in paragraph 4 of the first additional provision of Law 36/2006 of 29 November on measures for the prevention of tax fraud.

“Its full amount” means gross. Paragraph 1 is the defining feature of this regime: tax is charged on the receipt itself, with none of the reductions a resident would get. A non-resident who incurs real costs earning Spanish income generally cannot subtract them. Paragraphs 2 and 6 are the only openings.

Paragraph 2 allows three expense heads and no others. For services, technical assistance and engineering installation work, the base is gross income less personnel costs, the materials actually incorporated into the works, and utilities. Rent, insurance, finance costs, head-office overheads and profit margin are not in the list.

Paragraph 6 is worth more than the rate difference. A taxpayer resident in the EU, or in an EEA State with effective exchange of information, may deduct expenses directly related to the Spanish income where the link is direct and indissociable. Everyone else is taxed on the gross figure under paragraph 1. Combined with the rate in article 25, this is the single largest divide in the Act between EU and non-EU taxpayers.

Article 25. Tax amount

1. The tax amount shall be obtained by applying the following rates of tax to the tax base determined in accordance with the preceding article:

a) As a general rule, 24 per cent. However, the rate shall be 19 per cent for taxpayers resident in another Member State of the European Union, or of the European Economic Area with which there is an effective exchange of tax information, on the terms provided for in paragraph 4 of the first additional provision of Law 36/2006 of 29 November on measures for the prevention of tax fraud.

b) Pensions and other similar benefits received by individuals not resident in Spanish territory, whoever generated the right to receive them, shall be taxed in accordance with the following scale:

Annual pension up to, euro	Tax, euro	Remaining pension up to, euro	Rate
0	0	12,000	8 per cent
12,000	960	6,700	30 per cent
18,700	2,970	onwards	40 per cent

c) Employment income of individuals not resident in Spanish territory, provided they are not taxpayers for Personal Income Tax, who provide their services in Spanish diplomatic missions and consular representations abroad, shall be taxed at 8 per cent where specific rules arising from international treaties to which Spain is a party do not apply.

d) In the case of income derived from reinsurance operations, 1.5 per cent.

e) 4 per cent in the case of maritime or air navigation entities resident abroad whose ships or aircraft touch Spanish territory.

f) 19 per cent in the case of:

1. Dividends and other income derived from participation in the equity of an entity.

2. Interest and other income obtained from the transfer of own capital to third parties.

3. Capital gains arising on transfers of assets.

g) Employment income received by individuals not resident in Spanish territory under a fixed-term contract for foreign seasonal workers, in accordance with labour legislation, shall be taxed at a rate of 2 per cent.

2. In the case of transfers of immovable property situated in Spanish territory by taxpayers acting without a permanent establishment, the acquirer shall be obliged to withhold and pay over 3 per cent, or to make the corresponding payment on account, of the agreed consideration, on account of the tax corresponding to those taxpayers.

The payment on account referred to in this paragraph shall not apply in cases of contribution of immovable property on the incorporation of, or an increase in the capital of, companies resident in Spanish territory.

Without prejudice to any penalties that may apply for the infringement committed, if the withholding or payment on account has not been paid over, the assets transferred shall be charged with payment of the lesser of that withholding or payment on account and the corresponding tax.

3. In the case of capital gains referred to in article 13.1.i).3 of this Act arising from the transfer of rights or interests in entities resident in countries or territories with which there is no effective exchange of tax information in accordance with paragraph 3 of the first additional provision of the Prevention of Tax Fraud Act, the immovable property situated in Spanish territory shall be charged with payment of the tax.

However, if the owner of that immovable property is an entity with tax residence in Spain, the rights or interests in that entity which, directly or indirectly, correspond to the taxpayer shall be charged with payment of the tax.

Twenty-four per cent, or nineteen. The general rate is 24 per cent, reduced to 19 for residents of the EU and of EEA States with effective exchange of information. Dividends, interest and capital gains are taxed at 19 per cent for everyone under letter f). The gap between 24 and 19 on business and service income, together with the expense deduction in article 24.6, is what makes EU residence materially cheaper.

The buyer of a Spanish property withholds 3 per cent, and the property answers for it. Where a non-resident sells Spanish real estate, the purchaser must withhold 3 per cent of the price and pay it over on account of the seller’s tax. If the purchaser does not, the property itself is charged with the lesser of that 3 per cent and the tax due. The charge travels with the asset: a buyer who skips the withholding is not merely exposed to a penalty, but has bought an encumbered property.

The pension scale is not the flat rate. Pensions are taxed on a three-band scale at 8, 30 and 40 per cent, regardless of who generated the entitlement. A modest pension is taxed more lightly than the 24 per cent general rate; a large one, considerably more heavily.

Article 26. Deductions

Only the following shall be deducted from the tax amount:

a) Amounts corresponding to deductions for donations on the terms provided for in article 69.3 of the consolidated text of the Personal Income Tax Act, approved by Royal Legislative Decree 3/2004 of 5 March.

b) Withholdings and payments on account made on the taxpayer’s income.

“Only the following” is meant literally. Two items: donations and tax already withheld. None of the corporate or personal credits are available. Foreign tax paid elsewhere is not relieved here either; that is what the treaty, not this Act, is for.

Article 27. Accrual

1. The tax shall accrue:

a) In the case of income, when it becomes payable or on the date of collection if earlier.

b) In the case of capital gains, when the change in assets takes place.

c) In the case of imputed income on urban immovable property, on 31 December of each year.

d) In the remaining cases, when the corresponding income becomes payable.

2. The presumed income referred to in article 12.2 shall accrue when it becomes payable or, failing that, on 31 December of each year.

3. In the event of the death of the taxpayer, all income pending imputation shall be regarded as payable on the date of death.

Imputed property income accrues on 31 December, on the property you held that day. Selling in November and buying again in January changes the figure; the charge is pinned to a single date rather than spread over the year.

Article 28. Return

1. Taxpayers obtaining income in Spanish territory without a permanent establishment shall be obliged to file a return, determining and paying the corresponding tax debt for this tax, in the manner, at the place and within the periods laid down.

2. The jointly and severally liable persons defined in article 9 may also file the return and pay the debt.

3. Taxpayers for this tax shall not be required to file the return corresponding to income in respect of which the withholding or payment on account referred to in article 31 has been made, except in the case of capital gains derived from the redemption of units in investment funds governed by Law 35/2003 of 4 November on collective investment undertakings, where the withholding made has proved lower than the tax amount calculated in accordance with articles 24 and 25 of this Act.

Article 28 bis. Draft return

1. The tax authorities may, at the request of taxpayers, make available to them, for information purposes only, draft returns, without prejudice to compliance with article 28(1) of this Act, exclusively in respect of the imputed property income referred to in article 13.1.h) of this Act, with the limits and conditions laid down by the Minister for Finance and Public Administrations.

A draft return shall be generated for each property giving rise to an imputation of property income.

2. Taxpayers seeking to regularise tax positions arising from returns previously filed may not sign or confirm the draft return.

3. The tax authorities shall make the draft return available to taxpayers in accordance with the procedure laid down by the Minister for Finance and Public Administrations.

The failure to make it available shall not release the taxpayer from compliance with the obligation to file a return.

4. Where the taxpayer considers that the draft return reflects its tax position for the purposes of this tax, it may confirm it, on the conditions laid down by the Minister for Finance and Public Administrations. In that case it shall be regarded as a return for this tax for the purposes of article 28(1) of this Act.

The filing and any resulting payment must be made at the place, in the manner and within the periods determined by the Minister for Finance and Public Administrations.

5. Where the taxpayer considers that the draft return does not reflect its tax position for the purposes of this tax, it must file the corresponding return in accordance with article 28 of this Act. However, in the cases determined by regulation, it may apply for the draft to be corrected.

6. The procedure for requesting a draft return shall be approved by the Minister for Finance and Public Administrations, who shall lay down the period and place for filing, and the cases and conditions in which the request may be made by electronic means.

Withholding usually removes the return, but not always. Under article 28(3) income that has borne the withholding in article 31 needs no return. The exception is the redemption of investment fund units where the withholding came out lower than the tax actually due: there the taxpayer must still file and settle the difference.

The draft return covers only the empty-property charge, and it is not a substitute for filing. It exists for the imputed income in article 13.1.h), it is informational, and the Act says in terms that not receiving one does not excuse a failure to file.

Article 29. Formal obligations

1. Taxpayers obtaining income of the kind referred to in article 24.2 shall be obliged to keep the records of income and expenses laid down by regulation.

2. Where they are required to make withholdings and payments on account, they shall be obliged to file a census return and to keep the records of income and expenses determined by regulation.

Article 30. Withholdings

Taxpayers operating in Spain without a permanent establishment shall be obliged to make withholdings and payments on account in respect of the employment income they pay, and in respect of other income subject to withholding which constitutes a deductible expense for obtaining the income referred to in article 24.2.

Article 31. Obligation to withhold and make payments on account

1. The following shall be obliged to make withholdings and payments on account in respect of income subject to this tax which they pay or credit:

a) Entities, including entities under the attribution regime, resident in Spanish territory.

b) Individuals resident in Spanish territory who carry on economic activities, in respect of the income they pay or credit in the exercise of those activities.

c) Taxpayers for this tax acting through a permanent establishment or without a permanent establishment but, in the latter case, only in respect of the income referred to in article 30.

d) The taxpayers referred to in article 5.c).

e) Insurance undertakings domiciled in another Member State of the European Economic Area operating in Spain under the freedom to provide services, in relation to operations carried out in Spain.

Diplomatic missions or consular offices in Spain of foreign States shall in no case be obliged to make withholdings or payments on account.

2. Persons obliged to withhold must withhold or pay on account an amount equivalent to that resulting from applying the provisions of this Act for determining the tax debt of taxpayers for this tax without a permanent establishment, or those laid down in an applicable convention for the avoidance of double taxation, without taking into account articles 24.2, 24.6, 26 and 44.

Without prejudice to the foregoing, the calculation of the payment on account shall be governed by the provisions laid down by regulation.

Notwithstanding the first sub-paragraph of this paragraph, on redemptions of units in investment funds governed by Law 35/2003 of 4 November on collective investment undertakings, the basis for calculating the withholding shall be that determined by regulation.

3. Persons obliged to withhold or to make payments on account shall assume the obligation to pay the amount over to the Treasury, and failure to comply with the former obligation cannot excuse them from the latter.

4. No withholding or payment on account shall be made in respect of:

a) Income exempt under article 14 or under an applicable convention for the avoidance of double taxation, without prejudice to the obligation to declare provided for in paragraph 5 of this article.

Notwithstanding the foregoing, there shall be an obligation to withhold or make a payment on account in respect of the income referred to in letters k) and l) of article 14(1).

There shall be no obligation to file a return in respect of the income referred to in article 14.1.d).

b) Income derived from the distribution of share premium or from a reduction of capital. The obligation to withhold or make a payment on account in these cases may be laid down by regulation.

c) Income paid or credited to taxpayers for this tax without a permanent establishment, where payment of the tax or the applicability of an exemption is evidenced.

d) The income referred to in article 118.1.c) of the consolidated text of the Corporate Income Tax Act, approved by Royal Legislative Decree 4/2004 of 5 March.

e) Income laid down by regulation.

5. The person obliged to withhold and to make payments on account must file a return and pay over to the Treasury, at the place, in the manner and within the periods laid down, the amounts withheld or the payments on account made, or a nil return where none fell to be made. That person shall also file an annual summary of withholdings and payments on account with the content determined by regulation.

The person obliged to withhold and to make payments on account shall be obliged to keep the corresponding documentation and to issue, on the conditions determined, a certificate evidencing the withholdings or payments on account made.

6. The provisions of this article are without prejudice to article 25.2.

The withholding ignores the very deductions the taxpayer is entitled to. Paragraph 2 requires the withholding to be computed without regard to articles 24.2, 24.6, 26 and 44. A supplier entitled to deduct personnel and materials, or an EU resident entitled to deduct directly related expenses, is still withheld upon as if none of that existed. The relief has to be recovered by filing a return and claiming it back, which is a cash-flow cost, not a tax saving.

Failing to withhold does not remove the duty to pay. Paragraph 3 makes the withholder liable to the Treasury for the amount whether or not it was actually deducted from the payment. A Spanish payer that pays a foreign supplier gross, on the supplier’s assurance that no tax is due, is left owing the tax itself.

Exempt does not always mean no withholding. The general rule in paragraph 4.a) is that exempt income bears no withholding, with treaty exemptions expressly included. But the same letter then carves out article 14.1.k) and l), the exemptions for EU pension funds and UCITS: those must still be withheld upon, and the tax recovered afterwards.

Article 32. Withholding obligations on employment income in the event of a change of residence

Employees who, not being taxpayers for this tax, are to acquire that status as a result of moving abroad may notify the tax authorities, recording the date of departure from Spanish territory, for the sole purpose of having the payer of their employment income treat them as taxpayers for this tax.

In accordance with the procedure laid down by regulation, the tax authorities shall issue a supporting document to employees who apply for it, which they shall communicate to the payer of their employment income resident or with a permanent establishment in Spain, stating the date from which withholdings and payments on account are to be made under this tax.

The foregoing shall not release the employee from the obligation to evidence the new tax residence before the tax authorities.

This is a withholding switch, not a residence ruling. The document tells the payer which tax to withhold from a given date. The last sentence is the important one: it does not establish the new residence, which still has to be proved separately.

Article 33. Investments by non-residents in Treasury bills and other forms of public debt

(Repealed.)

Where this sits

Chapter V, on the next page, deals with entities under the income attribution regime, where the tax looks through the entity to its members, and chapter VI with the separate levy on property held in Spain by non-resident companies.

Nothing here is advice on your own position, and this reading is not the official text. Spain publishes no official English version of this Act; where the wording matters to a decision, read it against the Spanish original linked above. Where a double tax treaty applies, article 4 gives it priority, and a treaty rate will often be lower than the rates on this page.