Spanish IRNR (living in Ireland)
Thread poster: Sandrine Guyennet

Sandrine Guyennet
Ireland
Local time: 11:03
Member (2014)
English to French
Mar 23, 2015

Hi,

An agency in Spain sent me a contract to sign which countains a paragraph about an income tax law for non-residents which is quite worrying. I live in Ireland and pay my taxes here. Does this paragraph mean I would be paid 24% less by the agency except if I ask the Revenue for a certificate (in this case, I can't be bothered, there are plenty of agencies with witch I can work without extra paperwork)?

"The Income Tax Law for Non-Residents 41/1998, of the 9th December (abbreviated IRNR) states that
in general 24% income tax should be withheld to professionals residing in a foreign country when
services are given to companies dwelt in Spain. However, if there is a convention to avoid double
taxation between Spain and the country of the non-resident, the provisions contained in that convention
will prevail and such certificate would be required as prove.
The certificate should clearly state that the beneficiary is resident of that country as defined by the
Spain/foreign country convention. This certificate is valid for one year from the issue date, and it must
be renewed once expired.
Please note that the certificate should be issued in the name of the person or the company sending the
invoice.
Once the certificate is obtained, please either send first a scanned or faxed copy (to +XXXXX),
and then send us the original hardcopy or notarized copy by post in order to not apply the 24% income
tax.
The countries with which Spain has subscribed conventions are: [...], Ireland, [...]

Thank you!

[Edited at 2015-03-23 09:31 GMT]


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Teresa Borges
Portugal
Local time: 11:03
Member (2007)
English to Portuguese
+ ...
It's quite simple! Mar 23, 2015

This matter has been discussed several times. This requirement has to do with the UN Double Taxation Convention which was signed by many countries, namely Ireland and Spain. Some of my clients (Greece and Portugal) require this. You need to fill a Double Taxation Form and this form should be signed and stamped by the Irish Tax Authorities. In Belgium, the procedure is quite simple.

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Sheila Wilson  Identity Verified
Spain
Local time: 11:03
Member (2007)
English
+ ...
A form for each country? Mar 23, 2015

Teresa Borges wrote:
You need to fill a Double Taxation Form and this form should be signed and stamped by the Irish Tax Authorities. In Belgium, the procedure is quite simple.

Do we need one (in theory, if not in practice) for every client's country covered by one of these agreements? I've worked with clients in just about every other EU country over the last few years, without ever being asked to justify anything. If this requirement becomes widespread, would I have to get one of these forms for each country, each year? That might be simple, but it would also be a real time-taker. Especially if clients insist on getting originals through the post. Stamps, envelopes...these are things of the past. I don't even know where the post-boxes are in my home town!


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Teresa Borges
Portugal
Local time: 11:03
Member (2007)
English to Portuguese
+ ...
I think that only agencies or direct clients... Mar 23, 2015

Sheila Wilson wrote:

Teresa Borges wrote:
You need to fill a Double Taxation Form and this form should be signed and stamped by the Irish Tax Authorities. In Belgium, the procedure is quite simple.

Do we need one (in theory, if not in practice) for every client's country covered by one of these agreements? I've worked with clients in just about every other EU country over the last few years, without ever being asked to justify anything. If this requirement becomes widespread, would I have to get one of these forms for each country, each year? That might be simple, but it would also be a real time-taker. Especially if clients insist on getting originals through the post. Stamps, envelopes...these are things of the past. I don't even know where the post-boxes are in my home town!


that are stock corporations or public limited companies require this form and you need to fill each year this form for each client (at least that's my case).


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Teresa Borges
Portugal
Local time: 11:03
Member (2007)
English to Portuguese
+ ...
@Sheila Mar 23, 2015

I send a signed form by email to my accountant and she contacts with the tax authorities. Two or three days later, she sends me back, also by email, the form signed and stamped and this goes by email to the client...

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Teresa Borges
Portugal
Local time: 11:03
Member (2007)
English to Portuguese
+ ...
@Sandrine Mar 23, 2015

I have found the Convention signed between Ireland and Spain here: http://www.revenue.ie/en/practitioner/law/double/spain.html

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Sandrine Guyennet
Ireland
Local time: 11:03
Member (2014)
English to French
TOPIC STARTER
I won't bother then Mar 23, 2015

Thank you for your answers!
I have clients in a dozen countries, both in Europe and in the rest of the world, and it is the first time I am asked for extra paperwork. If it was a matter of 2 clicks online I would do it, but I have no time to waste sending a letter to the Revenue department for just a single agency.


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Sandrine Guyennet
Ireland
Local time: 11:03
Member (2014)
English to French
TOPIC STARTER
This would be so simple Mar 23, 2015

Teresa Borges wrote:

I send a signed form by email to my accountant and she contacts with the tax authorities. Two or three days later, she sends me back, also by email, the form signed and stamped and this goes by email to the client...


Unfortunately, here it's by postal mail


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Sandrine Guyennet
Ireland
Local time: 11:03
Member (2014)
English to French
TOPIC STARTER
Exactly Mar 23, 2015

[quote]Sheila Wilson wrote:

Teresa Borges wrote:
Stamps, envelopes...these are things of the past. I don't even know where the post-boxes are in my home town!


That's my point of view, too. I would probably request this certificate of residence if I was working with the Spanish language, but I don't. It's the first (and I guess the last) time I have to deal with a Spanish agency.


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Thomas T. Frost  Identity Verified
Germany
Local time: 12:03
Member (2014)
French to Danish
+ ...
UN Double Taxation Convention / Spain Mar 23, 2015

Teresa Borges wrote:

This requirement has to do with the UN Double Taxation Convention which was signed by many countries, namely Ireland and Spain.


For the sake of clarity, the UN Double Taxation Convention and the OECD Double Taxation Convention are models, not conventions in force, that countries can base their bilateral double taxation conventions on and edit to their requirements as they wish.

Knowing that Spain has been hit by the crisis, this tax bureaucracy looks to me like indirect protectionism aiming to keep work in Spain, as it will be too complicated and expensive in many cases to hire foreign contractors. Similar stories have been coming from Greece, which is in an even worse situation than Spain. As the EU has no competence for dealing with income and corporation tax, it's uncertain if the European Commission would consider that such obstacles illegally hinder the free flow of capital and services, but maybe it should be tried.

Contractors resident in Denmark need to watch out, as Denmark gave notice on the bilateral tax convention with Spain some years ago because Denmark wanted to tax Danish expat pensioners' Danish pensions, and Spain (and France) refused to change the convention. It is possible, though, that Danish-resident contractors can use the Spanish tax paid as a tax credit in Denmark, reducing Danish tax with that amount. In that case, having cancelled the Convention would have the consequence that Denmark gets less tax on such services. Makes one think of shooting oneself in the foot.


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Spanish IRNR (living in Ireland)

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