What incomes obtained by non-residents without permanent establishment in Spain are exempt from Non-Residents' Income Tax (IRNR)?

What incomes obtained by non-residents without permanent establishment in Spain are exempt from Non-Residents' Income Tax (IRNR)?

Incomes which in accordance with the Income Tax regulations are exempt and are received by individuals, such as pensions due to total permanent disability or severe disability or public grants. The contents of letter (y) of Section 7 of the Personal Income Tax Act are excluded.

Interest and capital gains deriving from personal property obtained by residents in another member state of the European Union (EU), with these exceptions:

When such interest and/or gains are obtained via a tax haven.

When they are gains deriving from the transfer of stocks, shares or other rights in a company whose assets consist mainly in real estate properties located in Spain. In the case of individuals, when they are gains deriving from the transfer of stocks, shares or other rights in a company and the taxpayer, at some previous moment during the 12 months prior to the transfer, has participated direct or indirectly in at least 25% of the capital or equity of the said company. In the case of companies, that the transfer does not meet the requirements for application of the exemption provided for in Section 21 of the Corporation Tax Act.

Incomes from Public Debt.

Incomes of non-residents deriving from securities issued in Spain. 

Incomes of non-residents' accounts.

Incomes from the lease, assignment or transfer of containers or bareboat ships and aircraft, used in international maritime or air transport.

Profits distributed by subsidiary companies resident in Spain to their parent companies resident in another member state of the EU or the EES with effective information exchange, or to their permanent establishments located in other member states, provided that they fulfill certain conditions.

Incomes deriving from transfers of securities or reimbursement of shares in investment funds made in one of the official Spanish secondary securities markets, obtained by persons or companies resident in a country with which Spain has signed an Agreement with an information exchange clause, unless they are obtained via a tax haven.

Old age pensions provided for by Royal Decree 728/1993 of 14 May establishing old age pensions in favour of Spanish emigrants (with effects from 1 January 2001).

Grants and other amounts received by individuals and paid by the Public Administrations by virtue of international agreements of cultural, educational and scientific cooperation or by virtue of the Annual International Cooperation Plan approved by the Cabinet of Ministers (with effects from 1 January 2001).

Dividends obtained from 1 January 2007 until 31 December 2014 by individuals living in another European Union member state or in countries or territories with which there is effective exchange of tax information, with the limit of 1,500 euros, which will apply to all incomes obtained during the calendar year. This exemption does not apply if the dividends are obtained via countries or territories classified as tax havens. (This exemption has been eliminated from 1 January 2015).

Dividends and shares in profits obtained by pension funds equivalent to those regulated in the Revised Text of the Pension Plans and Funds Act (Legislative Royal Decree 1/2002 of 29 November), resident in another member state of the European Union or the EES with effective information exchange, or by permanent establishments of such institutions located in another member state.

Dividends and shares in profits obtained by collective investment institutions regulated by Directive 2009/65/EC of the European Parliament and the Council, or by collective investment institutions resident in member states of the EES with effective information exchange; however, under no circumstances may the application of this exemption originate a tax payment lower than that which would have resulted from having applied to these incomes the same rate of Corporation Tax paid by collective investment institutions resident in Spanish territory.

Fees between associated companies paid to a company resident in an EU member state or to a permanent establishment of this company in another EU member state, provided that certain requirements are fulfilled (with effects from 1 July 2011). Capital gains deriving from the sale of urban properties located in Spanish territory acquired from 12 May 2012 until 31 December 2012 have a 50% exemption.

This partial exemption is not applicable: In the case of individuals, when the property has been acquired from or transferred to the spouse or any person related to the taxpayer by straight-line or collateral kinship, consanguinity or affinity until the second degree, inclusive, or from or to a company associated with the taxpayer or with any of the aforementioned persons through any circumstances established in Article 42 of the Commercial Code, regardless of the residence and the obligation to prepare consolidated annual accounts.

In the case of companies, when the property has been acquired from or transferred to a person or company associated through any of the circumstances established in Article 42 of the Commercial Code, regardless of the residence and the obligation to prepare consolidated annual accounts, or from or to the spouse of such person or from or to any person related to him/her by straight-line or collateral kinship, consanguinity or affinity until the second degree, inclusive.

Exemption for reinvestment in habitual residence by taxpayers of the EU, Iceland and Norway (applicable to gains accrued from 1 January 2015): In the case of taxpayers resident in a member state of the European Union or the European Economic Space with effective exchange of tax information, the capital gains obtained by the transfer of what has been their habitual residence in Spain may be excluded from taxation, provided that the total amount obtained through the transfer is reinvested in the purchase of a new habitual residence. When the reinvested amount is lower than the total of the amount received in the transfer, only the proportional part of the capital gain obtained corresponding to the reinvested amount will be excluded from taxation.