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Tax exempt income but subject to the Personal Income Tax in Spain

Tax in SpainDo you work for a foreign company although you are tax resident in Spain due to you family situation? Then, be aware that you can obtain an exemption in your Personal Income Tax Return (in Spanish, the well-known IRPF) provided that you at least comply with these two conditions:

1º That you carry out those works for a company or entity which is not resident in Spain or has a permanent establishment abroad.

2º That on the territory where the works are carried out, an identical or analogue tax to the aforesaid tax is being applied, and that it is not a country of territory that has been qualified as tax haven according to the regulations.

This article might be of special interest to you if you are for example a fiscal resident in Spain due to presumption of residence when your minor children live in Spain or your husband or wife is pilot and works for a foreign airline company.

The law 24/2001 of 27th December 2001 modifies in its article 1 the law 40/1998, of 9th December, regarding the Personal Income Tax and other tax rules. This Law mentions such exemption and sets forth a maximum yearly limit of 60.101,21 euros that can be changed according to the regulations.

This exemption is not compatible with the application of deduction for double international taxation, unless the income is totally or proportionally higher than the aforesaid exemption limit.

For any enquiry on your fiscal, accounting or legal issues do not hesitate to contact our team of lawyers and tax advisors in Marbella.

When is a person considered to be resident in Spain?

  1. If he stays more than 183 days during one calendar year in Spanish territory.
  2. If his main activity or the base of his activities or financial interests is directly or indirectly situated in Spain.
  3. If the spouse from whom he is not legally separated and the children minor of age who depend on this natural person are usually residing in Spain.

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The law firm Arcos & Lamers Asociados, your lawyer and fiscal advisor under one roof, is situated in Marbella, in the heart of the Costa del Sol and offers their services all over Spain.

  • Wim Lamers
  • Accountants, Law in Spain, Spanish tax, Tax law,

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