Portuguese training grants for students in Spain may be tax-exempt

Students or researchers moving from Portugal to Spain to undertake studies or training should be aware of the tax treatment of the financial aid they receive for their maintenance and training. The Dirección General de Tributos (DGT) has clarified the scope of the exemption applicable to these amounts within the framework of the Convention between Spain and Portugal for the avoidance of double taxation.

What the DGT has ruled

In accordance with Article 21 of the Convention between Spain and Portugal, amounts received by a student to cover maintenance, study, or training expenses are not taxed in Spain if two concurrent requirements are met:

• The amounts must originate from sources located outside of Spain.
• The student must have been a resident in the other State (Portugal) before arriving in Spain.

However, the ruling notes that, pursuant to Article 23.3 of the aforementioned Convention, this exempt income must be taken into account to calculate the average tax rate applicable to the taxpayer's remaining income in Spain.

What this means for you

If you are a student residing in Spain receiving a training grant from Portugal, these amounts may not be subject to Personal Income Tax (IRPF). This represents tax relief to cover study and maintenance costs during your stay in Spanish territory.

However, the exemption is not absolute in terms of tax calculation. Although the grant is not directly taxed, its amount will be used to determine the tax rate that will be applied to your other taxable income in Spain. This means that the presence of this exempt income may increase the tax rate applied to the rest of your income.

What you should do

Upon receiving these grants, it is necessary to verify that the requirements regarding previous residence in Portugal and the origin of the funds are strictly met. It is recommended to analyze the taxpayer's entire tax situation, as the impact on the average tax rate may modify the global tax burden of the income that is indeed taxed in Spain. Each situation must be assessed individually to ensure compliance with current regulations.