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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 one 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 he/she will be regarded as non-resident in Spain. If he/she remains more than 183 days in Spain during the calendar year, he/she 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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