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V2528-15 1 September 2015 · SG de Fiscalidad Internacional Criterion in force
IRPF · rentas de capital inmobiliario

Spanish residents must pay income tax on Brazilian property rental income and can claim a double taxation deduction

A Spanish resident asks how to tax rental income from Brazilian real estate. The DGT states that the income must be taxed worldwide in Spain and that a double taxation deduction may be claimed under the treaty limits.

The question raised

Taxation in Spain of income from real estate capital originating from real estate located in Brazil.

The DGT's ruling

A resident in Spain must be taxed on the totality of their income, including income from real estate in Brazil, according to the worldwide income principle. According to the Convention between Spain and Brazil, this income may be subject to taxation in Brazil, but Spain may also tax it. To avoid double taxation, the taxpayer may deduct in Spain the tax paid in Brazil, within the limit of the portion of the tax corresponding to said income.

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