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V1365-18 24 May 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · residencia fiscal

Tax treatment of Chilean income in 2017 and 2018 based on fiscal residency and the double taxation treaty

A worker who rendered services in Chile for a Spanish company asks whether he must pay tax in Spain on his 2017 and 2018 income. The tax authority determines that in 2017, as a non-resident, foreign income was not taxable in Spain, whereas in 2018, as a resident, income was taxed worldwide under the Chilean double taxation treaty.

The question raised

Question posed: Whether taxation is due in Spain on the income received from Chile corresponding to the years 2017 and 2018.

The DGT's ruling

For the 2017 fiscal year, as the inquirer is a non-tax resident, employment income is not subject to taxation in Spain because it derives from an activity carried out abroad. For the 2018 fiscal year, as a tax resident, the income is taxed in Spain pursuant to the Personal Income Tax Law (LIRPF), since the Convention with Chile allows taxation in Spain if the employee does not remain in Chile for more than 183 days and the remuneration is paid by a Spanish company without a permanent establishment in said country.

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