Minimum taxation of permanent establishments

Law 22/2021, of December 28, on the General State Budget for the year 2022, with effect for tax periods beginning on or after January 1, 2022, modifies sections 4 to 6 of article 19 of TRLIRNR , introducing the concept of net quota of the Income Tax on Non-Residents, defined as the result of applying the bonuses and deductions provided for in the Corporate Tax regulations, which, in no case, may be negative.

These deductions and bonuses will be applied based on the circumstances that occur in the permanent establishment, and cannot be transferred to other establishments of the same taxpayer in Spanish territory.

The net amount will be deductible from the net quota as follows the amount of withholdings, payments on account and fractional payments.

In the event that these withholdings, payments on account and fractional payments actually made exceed the net amount of the tax, the tax administration will proceed to automatically return the excess, in accordance with the provisions of article 127 of the LIS .

On the other hand, Law 22/2021, of December 28, adds the tenth Additional Provision to the TRLIRNR, establishing that with effect for tax periods beginning on or after January 1, 2022, in order to determine the tax debt of the Non-Resident Income Tax, the minimum taxation regulated in article 30 bis of the LIS will apply.