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V2615-15 8 September 2015 · SG de Fiscalidad Internacional Criterion in force
IRNR · rendimientos del trabajo

Foreign employment income is not taxed in Spain, but rental income is

A resident in Chile inquires about the taxation in Spain of their wages, rental income, and returns from a fixed-term deposit. The DGT determines that wages are not taxed in Spain as the activity is performed abroad, whereas rental income and bank interest are subject to Non-Resident Income Tax (IRNR) under certain treaty limits.

The question raised

Tax regime applicable to employment income received in the year 2014.

The DGT's ruling

Employment income is not taxed in Spain if the personal activity is carried out abroad. Rentals of real estate located in Spain are taxed under IRNR, without the possibility of deducting mortgage loan interest. Interest from fixed-term accounts in Spain is taxed under IRNR, but the tax cannot exceed 15% of the gross amount according to the treaty with Chile.

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