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V2620-14 6 October 2014 · SG de Fiscalidad Internacional Criterion in force
IRNR · retención

No retention of IRNR for non-resident artists or Moroccan companies

A foundation inquired about the obligation to withhold IRNR from non-resident artists and Moroccan companies operating in Morocco, and about VAT liability. The DGT clarifies that IRNR withholding does not apply when non-resident artists perform in Morocco, and that Moroccan companies are only subject to taxation in Spain if they have a permanent establishment in Spain.

The question raised

Two questions have been raised by the consulting Foundation:

The DGT's ruling

For non-resident artists, income from performances in Morocco is not taxed in Spain as it does not constitute income obtained within Spanish territory. If the artist is a resident in Spain, Personal Income Tax (IRPF) applies according to domestic regulations. Regarding Moroccan companies without a permanent establishment in Spain, their profits are only taxed in Morocco; therefore, the foundation must not apply Non-Resident Income Tax (IRNR) withholding.

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