Taxation workers, professionals, entrepreneurs and investors displaced to Spanish territory

The Official State Gazette (BOE) has just published the Royal Decree 1008/2023 of 5 December 2023 the Personal Income Tax Regulations are amended, approved by Royal Decree 439/2007 of 30 March 2007 on remuneration in kind, deduction for maternity, obligation to declare, payments on account and special scheme applicable to workers, professionals, entrepreneurs and investors posted to Spanish territory, and the Corporate Tax Regulation, approved by Royal Decree 634/2015, of 10 July, on withholdings and account incomea, of which we highlight, for the matter at hand:

(...) The aforementioned law has also introduced amendments to the special tax regime applicable to workers displaced to Spanish territory with the aim of attracting foreign talent. In particular, as regards the subjective scope of the scheme, it extends to employed persons, by allowing it to apply to workers who travel to Spanish territory to work remotely using exclusively computer, telematic and telecommunication means and systems and to directors of undertakings irrespective of their shareholding in the entity’s share capital. Also, This subjective scope of application is extended to those who travel to develop an entrepreneurial activity in the terms of Law 14/2013, of 27 September, on support for entrepreneurs and their internationalisation, to highly qualified professionals who provide services to start-ups and to those who carry out training, research, development and innovation activities, and meet certain requirements. In addition, it provides for the possibility of benefiting from the special scheme, that is, of opting for the taxation of the Income Tax of non-residents, to the children of the taxpayer under twenty-five years of age (or whatever their age in case of disability) and to their spouse or, in the case of the absence of a marriage bond, the parent of the children, provided that they meet certain conditions. These amendments require corresponding regulatory development.

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Article one. Amendment of the Regulation on Personal Income Tax, approved by Royal Decree 439/2007 of 30 March.

The following amendments are made to the Personal Income Tax Regulation:s, approved by Royal Decree 439/2007 of 30 March 2007:

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Seven. Article 113 is amended to read as follows:

‘Article 113. Scope of application.

1. Natural persons who acquire their tax residence in Spain as a result of their displacement to Spanish territory may choose to be taxed by the Income Tax of Non-Residents, maintaining the status of taxpayers for the Income Tax of Natural Persons, when they meet the conditions provided in Article 93(1) of the Law on tax.

2. For the purposes of Article 93(1)(b)(3) of the Tax Law, shall be qualified as an entrepreneurial activity that is innovative and / or has special economic interest for Spain and for this purpose has a favorable report issued by the National Innovation Company, SME (ENISA), in the terms established in Article 70 of Law 14/2013, of 27 September, of support to entrepreneurs and their internationalization, being necessary to have the residence authorization for business activity provided for in Article 69 of Law 14/2013, prior to their displacement to Spanish territory. In the case of citizens of the European Union and in the case of those foreigners to whom European Union law applies because they are beneficiaries of the rights of free movement and residence, they must have a favorable report issued by the National Innovation Company, SME (ENISA), qualifying such activity as an entrepreneur, which will be requested by the taxpayer to ENISA, through the General Directorate of Industry and Small and Medium Enterprises, prior to their displacement to Spanish territory. This report, of a mandatory nature, will be evacuated within ten working days of ENISA receiving the corresponding request.

Taxpayers who have opted for the application of this special regime must also have the report indicated in the previous paragraph, if they subsequently want to start an economic activity that has an entrepreneurial character different, where appropriate, from the one that motivated their displacement to Spanish territory.

For the purposes of Article 93(1)(b)(4) of the Tax Law highly qualified professionals shall be understood as those professionals who have the qualification referred to in Article 71 of the aforementioned Law 14/2013. In particular, this circumstance will be understood to be fulfilled when the taxpayer has the residence authorization referred to in the aforementioned article 71 of Law 14/2013, prior to his displacement to Spanish territory.

In addition, for the purposes of that provision, training, research, development and innovation activities are carried out where one of the situations referred to in Article 72(1)(a), (b), (c) and (d) of Law 14/2013 applies. In particular, this circumstance will be considered fulfilled when the taxpayer has the residence authorization provided for in the aforementioned article 72 of Law 14/2013, prior to moving to Spanish territory.

Pursuant to Article 93(1)(c) of the Law on tax, during the tax periods of application of this special scheme, the only economic activities that taxpayers covered by this special scheme may carry out are the economic activity of an entrepreneurial nature, the provision of services to start-ups or the training, research, development and innovation activities provided for in points 3 and 4 of Article 93(1)(b) of the Law on Taxation.

3. Individuals who acquire their tax residence in Spain as a result of their movement to Spanish territory when they meet the conditions provided for in Article 93(3) of the Tax Law may also choose to be taxed on the Income Tax of Non-Residents, maintaining the status of taxpayers for the Income Tax of Natural Persons.

To that end, such taxpayers may move to Spanish territory before or after the taxpayer referred to in paragraph 1 above moves, provided that, as a result of that move, if earlier, they do not acquire tax residence in Spain before the first tax period in which the special scheme applies to him or, if later, the latter would not have ended.’

Eight. Article 114 is amended to read as follows:

‘Article 114. Content of the special income tax scheme for non-residents.

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Nine. Article 115 is amended to read as follows: as follows:

‘Article 115. Duration.

This special scheme shall apply during the tax period in which the taxpayer acquires his tax residence in Spain, and during the following five tax periods; or in the case of taxpayers referred to in Article 93(3) of the Law on Taxation, until the last tax period in which it is applicable to the taxpayer referred to in Article 93(1) of the Law on Taxation, without prejudice to the provisions of Articles 117 and 118 of this Regulation.

For this purpose, the tax period in which residence is acquired shall be considered to be the first calendar year in which, once the posting has taken place, the stay in Spanish territory exceeds 183 days.’

Ten. Article 116 is amended, which reads as follows:

‘Article 116. Exercise of the option.

1. The exercise of the option to be taxed under this special regime must be carried out by means of an individual communication from each taxpayer addressed to the Tax Administration:

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Eleven. Article 117 is amended to read as follows:

‘Article 117. Resignation from the regime.

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Twelve. Article 118 is amended as follows:

‘Article 118. Exclusion from the scheme.

1. Taxpayers who have opted for the application of this special scheme and who, after the exercise of the option, fail to comply with any of the conditions determining its application will be excluded from this scheme. The exclusion shall take effect in the tax period in which the non-compliance occurs.

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Thirteen. Article 119 is amended to read as follows:

‘Article 119. Communications to the tax administration and accreditation of the scheme.

1. The option for the application of the regime will be exercised by means of communication to the Tax Administration, through the model approved by the holder of the Ministry of Finance and Public Function, who will establish the form and the place of its presentation.

2. In the communication to the taxpayer provided for in Article 93(1) of the Tax Law, the identification of the taxpayer, including his tax identification number and nationality, as well as, where applicable, that of the worker's employer, that of the entity corresponding to the administrator, the start-up company in which the professional provides services or the entity where the training, research, development or innovation activities are carried out, the date of entry into Spanish territory and the date of start of the activity that is recorded in the registration in the Social Security in Spain or in the documentation that allows, where appropriate, the maintenance of the social security legislation of origin.

Likewise, the supporting documentation of the registration in the Social Security in Spain or of the documentation that allows the maintenance of the social security legislation of origin or, in case the registration in the Social Security was not mandatory, supporting document of the date of beginning of the activity, the corresponding residence authorization, where appropriate, and the following documentation will be attached:

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e) In the case of travel as a result of the performance in Spain of an economic activity classified as entrepreneurial activity, the favorable report issued by the National Innovation Company, SME (ENISA), which will be requested directly by the taxpayer to ENISA, through the General Directorate of Industry and Small and Medium Enterprises, unless the residence authorization provided is the residence authorization for entrepreneurs referred to in Article 69 of Law 14/2013.

f) In the case of travel as a result of the carrying out in Spain of an economic activity by a highly qualified professional providing services to start-ups within the meaning of Article 3 of Law 28/2022 of 21 December 2022 on the promotion of the start-up ecosystem, documentation justifying the status of highly qualified professional, unless the residence authorisation provided is that of a highly qualified professional referred to in Article 71 of Law 14/2013, the accreditation of the registration as a start-up company in the Commercial Register or in the competent Cooperative Register to which it provides service, unless there is a procedure enabled for online verification of that circumstance, as well as a document justifying the provision of services to that start-up company.

g) In the case of travel as a result of training, research, development and innovation activities carried out in Spain, a document justifying the performance of those activities referred to in Article 113.2 of this regulation, unless the residence authorisation provided is that of training, research, development and innovation referred to in Article 72 of Law 14/2013.

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Second final provision. Entry into force.

This Royal Decree shall enter into force on the day following its publication* in the Official State Gazette.

The provisions of Article 1 shall take effect from the entry into force of this Royal Decree.

* Published in the Official State Gazette on 06/12/2023