Before delving into the taxable event, it is important to recall who the taxpayers under the Non-Resident Income Tax Spain(IRNR) are, as outlined in Article 8 of the Consolidated Text of the Personal Income Tax Law (TRLIRPF):
- Individuals and entities not residing in Spain who earn income in the country, unless they are taxed under the Personal Income Tax (IRPF).
- Foreigners residing in Spain who hold a position or employment, as well as members of diplomatic missions, consulates, and officials performing official duties in the mentioned territory, based on reciprocity.
- Entities under the regime of income attribution that were created abroad and operate in Spain.
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Taxpayers the Non-Resident Income Tax Spain
There are differents critiria to define the Non-Resident Income Tax Spain, and there are 3 principasl.
Time Criterion 90 – 180 Rules:
Anyone who stays more than 183 days in Spanish territory during the calendar year is considered a resident. Temporary absences are included in this period unless the taxpayer proves their tax residence in another country. In the case of countries or territories classified as tax havens, the tax administration may require proof of residence in the haven for 183 days in the calendar year.
Economic Criterion:
When the main center or base of their activities or economic interests, directly or indirectly, is located in Spain.
Family Criterion
It is presumed that the taxpayer has a habitual residence in Spain when, according to the previous criteria, their spouse (not legally separated) and dependent minor children usually reside in the said territory.
Meeting these requirements implies taxation under the IRPF and exclusion from the IRNR.
The taxable event of the Non-Resident Income Tax Spain(IRNR) is described in Article 12.1 of Royal Legislative Decree 5/2004 of March 5, which approves the TRLIRNR. It is defined as “the earning of income, in cash or in kind, in Spanish territory by the taxpayers of this tax, according to the following article.”
The object of the tax is found in Article 1, which states that this tax, in addition to its direct nature, “taxes the income earned in Spanish territory by individuals and entities not residing there.”
This definition aligns with the laws regulating both the Personal Income Tax and the Corporate Income Tax, establishing the taxable event as “the earning of income.”
