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V0379-14 13 February 2014 · SG de Fiscalidad Internacional Criterion in force
IRPF · residencia fiscal

Taxation of remuneration of an employee relocated to Chile depends on their fiscal residence

The DGT responds that tax obligations regarding an employee's remuneration will depend on whether the worker retains Spanish fiscal residence or becomes a non-resident.

The question raised

What obligations does the company have regarding the remuneration paid to said employee from the moment of their transfer to Chile?

The DGT's ruling

If the worker is a tax resident in Spain, they shall be taxed on their worldwide income and the Spain-Chile Double Taxation Convention shall apply. If they are a non-resident, they shall only be taxed in Spain on income from Spanish sources, i.e., for work performed in Spanish territory. Since the work will be performed in Chile, the remuneration shall not be subject to taxation in Spain and no withholdings shall be applied. The worker may choose to communicate the change of residence using forms 147 or 247 to manage withholdings.

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