If you own property or have income in Spain but you are not a tax resident here, you already know you have to file a non-resident income tax return. What many people don't realise is that not all of your Spanish income is taxable. Spanish law sets out a specific list of exemptions, and knowing whether your income falls into one of them can save you from paying tax you don't actually owe.

Here is what Spanish law treats as exempt from non-resident income tax:

  • Interest earned on non-resident bank accounts.
  • Dividends paid out by the Spanish subsidiaries of companies based in other European Union countries.
  • Income from public debt, and from securities issued in Spain, as long as there is no permanent establishment involved in Spanish territory. This covers the majority of cases.
  • Income and interest from the transfer of capital, as defined in article 23.2 of the Personal Income Tax Law (the Ley de IRPF).
  • Income listed as exempt under article 7 of the Personal Income Tax Law.
  • Income and scholarships awarded by the Public Administration under international agreements for educational, scientific, or cultural cooperation.

If any of your Spanish income falls under one of these categories, it should not be included as taxable income on your non-resident tax return. Given how specific and technical these exemptions are, it is worth having a professional check your situation before you file, so you don't pay more tax than the law actually requires.