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V1205-16 28 March 2016 · SG de Fiscalidad Internacional Criterion in force
IRNR · retención

Obligation to retain IRNR for pilots resident abroad flying routes with Spain

A Spanish flight crew management company asks whether it must withhold IRPF from pilots resident in Belgium and Denmark operating flights with Spain as origin or destination. The DGT determines that, generally, remuneration is subject to IRNR in Spain and retention is required, unless it is established that the true employer is the Norwegian airline.

The question raised

Question posed: Obligation to withhold, on behalf of the consulting entity, on the remuneration paid to the aforementioned pilots.

The DGT's ruling

Remuneration of pilots residing abroad for work on aircraft in international traffic is considered income obtained in Spain if it is not provided entirely abroad. Therefore, the resident entity in Spain must apply the Non-Resident Income Tax (IRNR) withholding. However, if Spanish regulations were to determine that the true employer is the Norwegian airline (and this company does not have a permanent establishment in Spain), the obligation to withhold could fall upon said company or may not apply depending on the case.

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