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Most common provisions of the Agreements

Distribution of tax authority in the Agreements, in general, for different types of income

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Agreements. Income from dependent work

As a general rule, the country of residence of the recipient of work earnings is that with the right to tax the income received, except where the employment takes place in another country, in which case it can also be taxed in that other country.

Therefore, the employment income paid by a Spanish company to a resident of a State with an Agreement with Spain, for work performed in their State of residence, can only be taxed in that State.

When earnings are received by a non-resident for employment in Spain, they are subject to tax in Spain. However, the right to levy tax will rest with the country of residence (and, therefore, will be exempt in Spain) if all the following circumstances apply simultaneously:

  • The employee does not stay in Spain for more than 183 days during the relevant tax year.

  • The remuneration received is paid by or on behalf of an employer who is not a resident in Spain.

  • The remuneration received is not paid by permanent establishment or a fixed base that the employer has in Spain.