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This is a topic on which foreign researchers in Spain should find general information and understand useful concepts in advance. The Spanish Tax Agency is responsible for applying the national tax system. Its website (www.agenciatributaria.es) is very complete and is available in English, with a special section for non-residents in Spain.
Individuals and legal entities in Spain are given a tax identification number for all tax-related matters. For non-Spanish citizens, this number is the same as the personal foreigner identification number that is assigned to them.
There are two types of taxes in the Spanish tax system: direct and indirect. Direct taxes are applied to income earned and assets. They include the Personal Income Tax (IRPF), Non-Resident Income Tax (IRNR), Corporations Tax, Inheritance and Donations Tax and Wealth Tax. Indirect taxes are applied to goods and services and the transfer of goods and rights in general. They include the Value Added Tax (VAT), Special Taxes (IIEE), Insurance Premiums Tax and Wealth Transfer Tax (ITP).
Foreign researchers who come to Spain for a limited period of time will probably have to pay IRPF or IRNR, depending on their residence status, VAT, IIEE and, in rare cases, Wealth Tax, ITP, etc.
These taxes are applied to income earned by individuals, depending on their residence status.
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 maintain a regular residence in Spain when the 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. However, there are certain considerations, such as their family's place of residence, personal relationships and close economic ties, country of origin or where they normally work. People in this situation must, in principle, pay IRPF on all income anywhere in the world. It is therefore a good idea to seek out information on your tax status when you come to work or research in Spain.
Individuals (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 the IRNR, maintaining their IRPF taxpayer status, for the tax period in which they move their residence and the following five tax periods. This is possible provided that:
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 certified with a certificate issued by the country's Tax Authority. These certificates are valid for one year.
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, under 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 Ministry of Economy and the Treasury website at www.mineco.es, available in Spanish and English, and the Spanish Tax Agency's website at www.aeat.es, in the "No-Residentes" ("Non-Residents") section.
If the foreign researcher residing in Spain is required to pay IRPF taxes and has had earnings (income 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.
Foreign researchers who are IRNR taxpayers and certify their residence in another EU country, 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, but without losing their IRNR taxpayer status.
a) In the case of IRPF taxpayers
If the researcher is an IRPF taxpayer, the grant is considered employment income and is subject to the IRPF. However, pursuant to regulations (IRPF Law 35/2006, in effect as of 1 January 2007), the following grants are tax-exempt: "Public grants and grants given by non-profit entities subject to the special plan regulated in Title II, Law 49/2002, dated 23 December, on the taxation plan for non-profit entities and tax incentives for patronage, received for the purpose of official studies, both in Spain and abroad, at all levels and grades of the education system, in the terms set forth in regulations (article 2 of the IRPF Regulations, approved by Royal Decree 439/2007).
Public grants and those given by the non-profit entities mentioned above for research described in Royal Degree 63/2006, dated 27 January, which approves the Statute of Research Personnel in Training, as well as those given by profit-making entities to civil servants and other employees of the Public Administrations and to university teaching and research staff are also exempt."
b) In the case of IRNR taxpayers
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 IRNR tax. This applies whenever they are the result of personal activities conducted in Spain or in the case of public compensation from the Spanish Administration, except when the work is conducted exclusively abroad and the compensation is subject to a personal tax abroad.
Although the grants are subject to the IRNR, they may be exempt (in accordance with IRNR legislation) in the following cases:
The Value Added Tax, or VAT, is an indirect consumer tax applied to three types of transactions: delivery of goods and provision of business or professional services, intra-community acquisition of goods and imports. The tax is applied to the end consumer and not the business owners and professionals, who are responsible for collecting the tax from their clients and depositing in the Public Treasury with declarations submitted to the Spanish Tax Agency. In the first case, VAT is paid when receiving any product or service. In the second case, VAT is applied to the entry of goods (excluding personal belongings) from one EU Member State to another. In the third case, it is applied when goods are imported from other countries. There are three VAT rates: general (16%), reduced (7%) and super reduced (4%); the latter is applied to basic or primary need products. For more specific information on the goods and services included in each category, visit www.aeat.es, in the Frequently Asked Questions section ("INFORMA").
These taxes are applied to the consumption of very specific goods: hydrocarbons (oil derivatives), alcoholic beverages and tobacco. This category also includes the Special Tax on Certain Modes of Transportation, which applies to vehicle registration. Remember that all vehicles (cars, motorcycles), both new and used, to be used by Spanish residents must be registered in Spain.
The taxes described above apply at the national level. However, there are also certain local taxes that are managed entirely by the municipal governments. The most relevant include:
For information, contact:
Agencia Tributaria ("Tax Agency")
Servicios Centrales ("Central Services")
c/ Infanta Mercedes, 37
28020 Madrid
Tel.: 91 583 70 00
Basic tax information: 901 33 55 33
www.agenciatributaria.es
