Information about the Special System

Private individuals acquiring tax residence in Spain as a result of their transfer into the country can opt to pay non-Residents Personal Income Tax, whilst maintaining their status as Personal Income Tax taxpayers during the tax period in which the change in residence takes place and during the following five tax period, when, in the terms established by tax regulations, the following conditions are met (regulations prevailing from 1 January 2015):

  1. That they have not been residents in Spain for the ten tax periods prior to the period in which they transferred to Spain.
  2. That the transfer to Spain took place as a result of any of the following circumstances:
    1. As a result of a work contract, with the exception of special employment agreements with professional sportspeople regulated by Royal Decree 1006/1985 of 26 June.

      This condition will be deemed to have been met when an ordinary or special employment agreement is entered into, other than the one mentioned above, or a statutory relationship with an employer in Spain, or when the transfer is ordered by the employer or a transfer letter from the employer exists.

    2. As a result of acquiring the status of director of a company, without a shareholding therein, or, when a shareholding is held, it does not determine the entity's consideration as a related company in the terms set forth in article 18 of the Spanish Corporation Tax Act.
  3. That he/she does not obtain income that could be classed as obtained through a Public Entity located in Spain.

To benefit from this option the taxpayer will have to submit the model 149 before the Tax Administration.The taxpayers who may have chosen this system will use the same model to renounce this system or when they are excluded from it because they break one of the key conditions of its application.The tax return will be made using form 151.

However, workers transferred to Spain before 1 January 2015 may opt to apply the special regime as applicable at 31 December 2014.To exercise this option, they must file the tax return corresponding to the year 2015 on form 150, instead of form 151.The option will be maintained until the end of the special regime's application, and form 150 must also be used in the remaining years during which the regime is applicable.

To complete the information, please check article 93 of the Law 35/2006, of the 28th of November, of the Income Tax and articles 113 to 120 of the Tax Regulations, approved by the Royal Decree 439/2007.