Did you know that by changing your tax residence to Spain, you can benefit from significant tax savings over the next 5 years, thanks to the new Startups law?
At Grupo Fidelitas, we have first-hand knowledge of the advantages of living and working in Asturias, and we offer a team of lawyers and economists to assist you with all the necessary procedures to establish your business or company in this community.
Contact us now and enjoy a 10% discount on the first legal, tax, or accounting service you hire at our firm.
And if you are considering changing your residence to this natural paradise, this information is of interest to you.
In essence, the special regime allows individuals who acquire their tax residence in Spain as a result of moving to Spanish territory to opt for a special regime in which they pay taxes under the Non-Resident Income Tax, while maintaining the status of taxpayers for Personal Income Tax (IRPF) during the tax year in which the change of residence occurs and the following five years. This is an optional regime for those who come to Spain to work and become Spanish tax residents. Normally, when a person becomes a Spanish tax resident, they have to file Personal Income Tax (IRPF) in Spain. However, this special tax regime allows for taxation in a similar way to non-residents, even when being Spanish residents, resulting in lower taxation for high-income individuals.
This tax regime was modified last December by Law 28/2022, of December 21, on the promotion of the emerging business ecosystem, expanding its scope to professionals, entrepreneurs, and investors moving to Spanish territory under the conditions indicated in the aforementioned law.
The conditions to apply the special regime are as follows:
1. Not having been a resident in Spain during the five tax periods prior to the one in which the move to Spanish territory occurs.
2. The move to Spanish territory occurs either in the first year of applying the regime or in the previous year, as a result of one of the following circumstances:
As a result of an employment contract, with the exception of the special employment relationship of athletes. This condition will be considered fulfilled when starting an employment relationship, other than the one previously mentioned, or a statutory relationship with an employer in Spain. Likewise, this condition will be considered fulfilled when the move is ordered by the employer and there is a relocation letter from the employer, or when, without being ordered by the employer, the work is done remotely, exclusively using computer, telematic, and telecommunications means and systems. In particular, this circumstance will be considered fulfilled in the case of employed workers who have the internationally recognized teleworking visa provided by Law 14/2013.
As a result of acquiring the status of administrator of an entity. In the event that the entity is considered a patrimonial entity as provided in Article 5(2) of the Corporate Income Tax Law, the administrator cannot have a participation in that entity that would determine their classification as a related entity.
As a result of carrying out in Spain an economic activity qualified as an entrepreneurial activity, in accordance with the procedure described in Article 70 of Law 14/2013, of September 27, in the terms established by regulations.
As a result of carrying out an economic activity in Spain by a highly qualified professional providing services to emerging companies, as defined in Article 3 of Law 28/2022, of December 21, on the promotion of the emerging business ecosystem, or carrying out training, research, development, and innovation activities, receiving remuneration that represents more than 40% of the total of business, professional, and personal work income. Regulations will establish the means of proving the status of highly qualified professional, as well as the requirements for classifying activities as training, research, development, and innovation.
1. Not earning income that would be classified as obtained through a permanent establishment (*) located in Spanish territory, except in the cases provided in the previous points (carrying out an entrepreneurial activity in Spain or conducting economic activity as a highly qualified professional).
Opting for this regime implies determining the tax debt for Personal Income Tax (IRPF) exclusively based on income obtained in Spanish territory, following the rules established in the Non-Resident Income Tax Law (LIRNR) for income obtained without the mediation of a permanent establishment, with certain specificities. Specifically, for the determination of the tax base, except for dividends, interest, and capital gains, the following rates are applied:
||Aplicable Rate/ Percentage
|Up to 600.000
As you can see, the main advantage of the special tax regime compared to Personal Income Tax (IRPF) is the fixed tax rates of 24% for income up to 600,000 euros and 47% for income exceeding this amount. This fixed tax rate in the special tax regime is very favorable for high-income taxpayers. Furthermore, taxpayers who choose to apply this regime have the obligation to file Wealth Tax (Form 714), but they will be subject to the “real obligation” mode (in contrast to the “personal obligation” mode), meaning they will only be taxed on assets or rights established in Spain, rather than their global assets.
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