Yield not subject to taxation

On the contrary, in spite of being paid to non residents by the people or firms aforementioned, the following revenue shall not be considered to have been obtained in Spain:

a) The yield paid due to economic activities (other than those indicated under letter b) below) performed fully abroad, such as, for example, that paid due to international purchase and sale of merchandise, including the mediation commissions on these, as well as the accessory and related expenses.

b) The yield paid for services rendered, such as studies, projects or technical assistance, when such services are used completely outside the Spanish territory and are directly related to activities by the payer directly linked to activities performed abroad by the payer, except if they are related to assets located in Spain.

c) The yield paid to non resident persons or firms located abroad, at their expense, when the relevant services are directly related to the activity by the permanent establishment abroad.

d) The yield from work, when all the work is performed abroad and the worker is subject to personal taxes abroad.

e) The yield obtained from real estate located abroad.

On the other hand, yield obtained from installation or assembly of machinery or installation from abroad are not subject to taxation either, when the said installation or assembly is performed by the supplier of the machinery or installation and its amount does not exceed 20 per 100 of the acquisition price of said elements.

Exemptions

The following revenue obtained by non residents without the mediation of the permanent establishment is exempt from non resident income tax (I.R.N.R.):

1. Yields that, according to the personal income tax (I.R.P.F.) regulations, are exempt and are received by natural persons, such as, for example, lottery proceeds, pensions for absolute permanent incapacity or major invalidity, or public grants.
2. Assistance pensions for the elderly, recognised pursuant to Royal Decree 728/1993, of 14th May, which establishes the assistance pensions in favour Of Spanish emigrants.
3. The interest and capital gains obtained on moveable goods obtained by residents in another member State of the European Union (U.E.), with three exceptions:

   - When the interest and gains are obtained through a tax haven.

   - In the case of gains arising from transmission of shares, stakes or other rights in a company whose assets mainly consist of real estate located in Spain.

   - In the case of gains arising from conveyance of shares, stakes or other rights in a company and the tax payer, at any time during the 12 months prior to conveyance, has held a direct or indirect stake of at least 25 per 100 of the assets of that firm.

4. The yield obtained from Public Debt, except if obtained through a tax have.
5. The yield and capital gains on stock issued in Spain by non residents.
6. The yield from non resident accounts.
7. The profit distributed by subsidiaries resident in Spain to their parent companies resident in another member state of the European Union, as long as certain conditions are fulfilled.
   The parent company is that which holds a direct stake of at least 25 per 100 in the capital of the other company. The company held will be the subsidiary. In order to apply this exemption the parent company is required not to have its residence in a country or territory classified as a tax haven.
8. The yield obtained from trading stock on secondary official stock markets in Spain, obtained by persons or firms resident in a country with which Spain has signed a convention with an information exchange clause.
9. The grants and others sums received by individuals, paid by the Public authorities, by virtue of international agreements and conventions on Cultural, Educational and Scientific Co-operation, or by virtue of the Annual Plan for International Co-operation approved by the Council of Ministers.