What is the IRNR?

If you are foreigner and work or have a business in Spain, you must know the IRNR or income tax. non-residents. This post tells you what it consists of and where and how it is applied. The IRNR is a direct tax that taxes income obtained in Spain by individuals or entities not resident in our country.

Where is the IRNR applied?

The IRNR is applied throughout the Spanish territory taking into account:

• The regional regimes of the Basque Country and Navarra.
• The special regulations applicable in the Canary Islands, Ceuta and Melilla.
• What is established in the applicable international conventions?

Who is the IRNR taxpayer?

The taxpayers in the IRNR are the following:

• Natural persons and entities not resident in Spain that obtain income in our country and that do not pay IRPF taxes.
• Foreign natural persons who reside in Spain and are members of a diplomatic mission.
• Entities in Spain incorporated abroad are subject to the income attribution regime.

To determine residence, the rules of the IRPF law are applied; that is, a natural person will be deemed to reside in Spain when:

• Stay in our country more than 183 days a year.
• The base of its activities is located in Spanish territory
• The spouse is not legally separated, and the taxpayer’s minor children reside in Spain.

In the case of an entity or legal person, it is considered to reside in Spain when:

• It has been established according to Spanish law.
• Have your domicile in Spain.
• Have an effective management headquarters in Spain.

Obligation to appoint a tax representative

To control non-residents’ tax, the law imposes the obligation to appoint a tax representative. The taxpayer of the IRNR or his representative must inform the Tax Administration of the appointment within two months from when it is made.

What is taxed with the IRNR?

The IRNR taxable event is as follows:

• Income derived from economic activities in a permanent establishment in Spain.
• The income from economic activities without a permanent establishment. This is the case for artists and athletes.
• Work income when it derives from work performed in Spain and is remuneration paid by the Spanish administration.
• Pensions when they derive from employment carried out in Spain.
• The remuneration of administrators, members of the board of directors and boards of an entity resident in Spain.
• Dividends derived from an entity resident in Spain.
• Interest or income obtained from the transfer to third parties of capital paid by persons or entities domiciled in Spain.
• The fees or royalties made by people or entities residing in Spain.
• Income derived from real estate located in Spain.
• The income is attributed to natural taxpayers who own urban real estate in Spain.
• Capital gains derived from securities issued by persons or entities residing in Spain.