The income obtained without a permanent establishment being used must be taxed separately for each total or partial accrual of the income taxed.
Taxation must be operation by operation, so there may be no compensation between capital gains and losses.

Taxable base

In general terms, the taxable base is formed by the full sum accrued, that is to say, without deduction of any expense.

Taxation rate

As of 1st January 2001, the applicable tax rates will be:

1. In general terms, 25 per 100.
2. Dividends and others yields obtained from stakes in company equity, 18 per 100.
3. Interest and other yields obtained from cession of equity to third parties, 18 per 100.
4. Pensions and passive credit received by non resident natural persons are taxed according to a scale (see the specific section on pensions).
5. The income from work by natural persons who are non resident in Spanish territory, as long as they are not Personal Income Tax (I.R.P.F.) payers in the service of the Diplomatic Mission and Consular Representations of Spain abroad, when it is not appropriate to apply the specific regulations arising the International Treaties, 8 per 100.
6. The yields obtained from reinsurance operations, 1.5 per 100.
7. Seagoing or airborne shipping firms resident abroad whose ships or aircraft moor or land in Spanish territory, 4 per 100.
8. Capital gains, 35 per 100, except for yields obtained on conveyance or reimbursement of shares or stakes representing the capital or assets of collective investment institutions, which will be taxed at the rate of 18 per 100.

Deductions

All that may be deducted from the tax quota are:

- Deductions for donations.
- The retention that may have been performed on the tax payer's income.

Used to declare any kind of income (just one income) obtained by a non resident without a permanent establishment, except for gains on real estate which are declared on their specific form (212).

Place of presentation
These tax returns must be presented at the Delegation or Administration dependent on same, according to the following rules:

• If it is a real estate revenue or rent assigned to a natural person who is the owner of an urban building, that of the place in which the building is located.
• In the remaining cases:
  • If the tax return is presented by a representative, a person severally responsible or a retainer, the Office is that of their tax domicile.

  • If the tax return is presented personally by the taxpayer, that of his representative's tax domicile. In the absence of a representative:

    - If a yield is declared, that of the tax domicile of the payer of same.

    - If gains on assets subject to retention are declared, that of the tax domicile of the retainer; if not, that of the tax domicile of the custodian or manager of the goods or rights or, failing that, the Office of the Tax Agency in Madrid.

  
  However, the Central Unit for Management of Major Companies at the National Inspection Office and the Regional Management Units for Major Companies of the Special Offices of the State Tax Administration Agency shall be competent in the case of tax returns presented by taxpayers assigned to these, or in the case of tax returns presented by tax payers and, in application of the rules set in the preceding paragraphs, the retainer or person severally responsible who determines the place of presentation is assigned to these Units.

Deposit or application for reimbursement:

• In tax returns with a quota to be deposited, the deposit shall be performed as follows:
  • With labels: at any collaborating agency in the relevant province for the Office.
  • Without labels: at the deposit firm that provides the Till service at the Competent Office or Administration, according to the above rules.
• Tax returns with sums to be reimbursed, at the competent Office or Administration, according to the above rules.

Term:
a) Tax returns to be deposited or zero quota:

• In general, this will be one month as of the date of accrual of the income declared.
• The income imputed to urban real estate must be included between 1st January and 20th June following the date of accrual.

b) Tax returns with application for reimbursement: these may be presented, as of the end of the period for declaration and deposit of the retention or income to account that give rise to the return, within the following terms:

• two years, in the case of the application arising from application of a Convention to avoid double taxation or, if appropriate, in that foreseen in the Order to develop the Convention. This term will be four years, on condition there is reciprocity, if thus declared by the Finance Minister.
• Four years, in the rest of the cases.

Collective tax return: Form 215, in pesetas and euros

Allows several income items generated in a same calendar quarter to be grouped together on a same tax form by one or several taxpayers.

That tax return may not include the following income:

- Income with deduction of certain expenses.

- Income imputed to urban real estate.

Terms:
The 20 first calendar days of the month of April, July, October and January.

For tax returns when reimbursement is requested, the terms are the same as indicated for form 210.

Place of presentation and deposit:
The place of presentation and deposit coincides with that indicated in relation to Form 210.

On the contrary, no tax shall be paid in Spain on the income from work paid by company owners and firms resident in the territory of Spain to non resident taxpayers for work performed outside of Spain, as long as the work is rendered fully abroad and the income i subject to personal income tax abroad.

2Income from economic activities.
In the case of income from economic activities (rendering services, technical assistance, installation or assembly works, etc.), performed in Spain by non residents without a permanent establishment being used, the taxable base shall be determined by the difference between full income and the following expenses:

- Personnel expenses

- Procurement expenses

- Supplies

The general taxation rate of 25 per 100 will be applied to the taxable base obtained thus.

3Yield obtained from real estate.
Regardless of whether the real estate is let or not, the yield obtained therefrom is subject to Non Residents' Income Tax. However, the tax treatment is different according to whether the building is let or not.

NON LET URBAN ESTATE
The non resident taxpayers who own urban buildings assigned to their own use, ceded free of charge or empty, are subject to Non Resident Income Tax. To these ends, they must calculate the income as 2 per 100 of the cadastral value of the building (1.1 per 100 of the cadastral value if such value has been revised) the tax rate is 25 per 100.

LET OR SUBLET REAL ESTATE
The income calculated must cover the full after received from the tenant for all items, including, when appropriate, that for all the assets ceded with the building, excluding Value Added Tax, without deducting expenses.

If the building is only let part of the year, the yield must be determined as in the previous paragraph for the months in which the lease lasts, and for the remaining ones, the proportional part of 2 per 100 of the cadastral value shall be found.

Note:
Should real estate be let and there be at least one premises available in Spain dedicated exclusively to management of that activity and a person to be employed under a labour contract, the activity carried out is of an entrepreneurial nature through a permanent establishment and must be taxed in accordance with the rules foreseen in the section on "Income obtained through a permanent establishment".

4Income received from dividends or interest.

Non residents of Spain who receive dividends or interest paid by a person or public or private entity resident in Spanish territory must pay Spanish tax on Non Resident's Income. If there is a convention, that income would be taxed at a lower tax rate to the general one and, in the case of interest, for residents of a country in the European Union, this shall be exempt as long not obtained through a tax haven.

The interest arising from Public Debt shall also be exempt (except when obtained through tax havens), and the yield from non resident accounts.

Taxable base:

This will be the full amount of said dividends or interest.

Tax rate:

In general terms, from 1st January 2001 the 18 per 100. For residents of a country with a Convention, the applicable rate will be that established in the actual Convention, which in general terms shall be lower than 18 per 100.

5 Pensions.

When residents abroad receive a pension paid by a resident in Spain, the pension shall be subject to Spanish tax upon the full amount, the following scale being applicable:

6Gains obtained from the sale of real estate.

Capital gains obtained from the sale of real estate shall be a taxable income.

In general terms, the gains shall be determined by the difference between the conveyance and acquisition values.

The acquisition value shall be formed by the real amount for which the building was acquired, to which the amount of the expenses and taxes inherent to the acquisition paid by the party now conveying shall be added. According to the year of acquisition, that value will be corrected by application of the updating coefficients established annually in the General State Budget Act. The amount determined thus shall be reduced, when appropriate, by the amount of the statutory amortisation performed, calculating a minimum amortisation in any case. In turn, these amortisations shall be updated according to the year to which they are assigned.

The conveyance value shall be the real amount for which the disposal is performed, less the amount of the expenses and taxes inherent to the conveyance that have been paid by the seller.

However, in the case of natural persons, if the building was acquired prior to 31st December 1994, the gain previously found shall be reduced by 11.11% per annum for each year it has remained in the estate exceeding two. For the purposes of calculating that time, the number of years between the acquisition date and 31-12-96 shall be taken and rounded upward. The amount of gain subject to taxation may be obtained by applying the percentage from the following table to the gain previously calculated:

Tax rate:

The taxation rate of 35 per 100 shall be applied to the base determined thus.

Form, term and place of presentation of the tax return:

• Form: 212
  

• Term: three months as of the end of the term the person who acquired the building had to deposit the retention (that term is, in turn, of one month from the date of the sale).

• Place: At the Office of Administration of the Tax Agency in the place where the building is located.

  Retention to account

  The person who acquires the building, whether a resident or not, is obliged to withhold and deposit 5 per 100 of the consideration agreed at the Public Treasury. This retention has the status for the seller of a payment to account of the relevant tax for the gains arising from the conveyance. Thus, the buyer shall deliver the non resident seller a copy of form 211 (with which the retention is deposited) in order that the latter may deduct the retention from the quota to be deposit arising from the tax return on the gains. If the amount withheld is greater than the quota to be deposited, the surplus may be reclaimed.

  However, in the case of natural persons, if more than 10 years have elapsed between the date of acquisition of the building and the last improvements performed in it and 31st December 1996, there shall be no capital gains, nor the obligation to present a tax return and, thus, nor shall there be the obligation to withhold and deposit the said 5 per 100.

  Term

  1 month as of the date of conveyance of the building.

  Form

  211.

  
  Return of the surplus withheld

  In the case of capital losses, on in the case of the retention performed being greater than the quota, the surplus withheld may be reclaimed. The reimbursement procedure is initiated by presenting tax return form 212 to the Office or Administration stated. The reimbursement shall be performed by bank draft to the account stated on the tax return form.