Personal Income Tax (IRPF) withholdings incurred by a non-resident may be deducted from Non-Resident Income Tax (IRNR)

Changing tax residence from one country to another involves a transition in the tax regime that can generate duplications or credit balances. A recurring issue is the treatment of Personal Income Tax (IRPF) withholdings that have been applied to a taxpayer before they formally managed to prove their non-resident status.

What the DGT has ruled

The DGT has clarified that if a person is a tax resident in a country such as the United Kingdom, they must pay tax in Spain under Non-Resident Income Tax (IRNR) for income from Spanish sources, such as public remuneration from ICEX.

In this context, the administration establishes that IRPF withholdings made from the beginning of the year until the moment the change of residence is proven are considered advance payments of IRNR. Therefore, they are not lost, but rather integrated into the non-resident regime for the corresponding regularization.

What this means for you

If you move abroad and change your tax residence, it is likely that during the first months of the year you were subject to IRPF withholdings. According to this criterion, those amounts should not be treated as a lost expense, but as a credit in your favor in your non-resident tax return.

For this mechanism to be effective, it is essential to have the documentation proving the new residence and the receipts for the withholdings applied. Compliance with the regulations of the Convention between Spain and the United Kingdom, together with the TRLIRNR, is the framework that allows this offset.

What you should do

To proceed with the refund or regularization of these amounts, the taxpayer must take the following steps:

• File the corresponding tax return using Form 210.
• Provide the receipts for the IRPF withholdings incurred during the transition period.
• Include the tax residence certificate from the new destination country to validate the non-resident status.

It is fundamental to assess each international mobility situation, as the correct management of these advance payments avoids the loss of liquidity before the Tax Administration.