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Spain - Special considerations for short-term assignments

Spain - Special considerations for short-term ass...

Taxation of international executives

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Residency rules
Payroll considerations
Taxable income
Additional considerations

For the purposes of this publication, a short-term assignment is defined as an assignment that lasts for less than 1 year.

Residency rules

Are there special residency considerations for short-term assignments?

As a general rule, if as a consequence of the short-term assignment the individual remains in Spain for less than 183 days during the calendar year, in principle they will be regarded as non-resident in Spain. If they remain more than 183 days in Spain during the calendar year, they will be regarded as tax resident.

Payroll considerations

Are there special payroll considerations for short-term assignments?

Not applicable.

In case there was a tax liability resulting for the short-term assignee, potential withholding tax obligations might apply.

Taxable income

What income will be taxed during short-term assignments?

Taxation of income received during a short term assignment with non-resident status will be limited to Spanish-source income obtained during the assignment (the eventual applicability of Tax Treaty provisions will have to be taken into consideration). If the individual is a tax resident, this income would be taxable although certain exemptions are available.

Additional considerations

Are there any additional considerations that should be considered before initiating a short-term assignment in Spain?

The charge of the cost of the assignee to the local company needs to be considered and also the eventual applicability of Tax Treaty provisions.

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