The Spanish federal government has announced important adjustments on the Spanish income tax law, consisting of relaxations in the laws of the special tax duty program for inbound assignees in 2015. Workers eligible for unique tax routines or for inbound assignees will need to think about whether they'll choose to pay tax based on old policies or not. Also, employers with tax obligation will analyse the influence of the brand-new rules on their tax repayment prices.

The Unique Tax laws Program for incoming assignees

Significant adjustments have actually been made to the laws so as to get the Special Tax Program for inbounds, as detailed here:

  • Spanish government will now include a director/administrator in the Spanish tax law body, as long as the director doesn't get special rights. If he/she get special tax allowances, his involvement does not imply that he belong to events under transfer prices rules.
  • That the tax collection work should only be carried out in Spain. This is a twist, which will benefit the Spanish tax law body. It entails that permanent establishment in Spain has actually been eliminated and, even if some jobs are executed abroad, all the work revenue will be taxed in Spain. Therefore, the need for the total repayment to be assigned by the overall quantity of solutions provided abroad has additionally been abolished.
  • Another change is that taxpayers covered by this tax obligation regime cannot obtain compensation deemed except if it's under the normal locals' tax guidelines.
  • The general level tax duty rate has actually decreased from 24.75 % to 24 %. Over EUR600, 000; a level tax rate of 45 % will be used (it was 47 % in 2014). Tax rates on investment income and also capital gains will indeed match when it comes to normal tax residents.
  • Taxpayers who settled in Spain prior to 1 January 2015 might continue to be taxed under the Special Tax Regime using previous tax rules, including the 24.75 % tax price. The election to remain under the old guidelines or sign up with the brand-new ones need to be made via the taxpayer's 2015 income tax return. In addition, the decision binds the taxpayer all through the Special Tax obligation Program.

Other important tax obligation adjustments

  • The previous exemption for severance payments of 45/33 days exempted each year of service will certainly be restricted to a maximum of EUR180, 000. Any other payments will be subject to tax.
  • The 40 % reduction on irregular income and also on earnings created in a period exceeding two years has actually been reduced to 30 %.
  • The tax regulations for the application of the 40 % decrease for stock option income, such as the specific restriction over which the reduction could use, will certainly be eliminated and also changed with the general tax obligation regulations for the application, decreasing with 30%. A transitional routine could apply for stock choices provided prior to 1 January 2015.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.