Non-EU remote workers and digital nomads that moved to Spain in 2023 thanks to the Startups Law and its new digital nomad visa (DNV) will benefit from the non-resident income tax rate (IRNR) of 24 percent. The Spanish government has confirmed this on a 6th of December 2023 announcement, putting an end to months of uncertainty. Spain’s Startups Law, in effect for around a year now, created a huge amount of international interest when it was launched at the beginning of 2023. The idea was to make Spain a more enticing destination for foreign talent, however some specific questions remained until now.
Will all DNV holders benefit from the lower tax rate?
The announcement clarifies that remote workers on a permanent contract from an overseas company where the work is exclusively performed digitally, and the company explicitly allows the worker to work from abroad. The type of work needs to be related to training, research, development and innovative activities. The workers need to be registered as self-employed (autónomos) and be part of the Social Security system. The clarification comes as it pertains to self-employed workers who do not have one (or more) contracts where it is explicitly stated that they have a fixed employee relationship with a client company. These will not be able to benefit from the reduced tax rate. However, within the announcement it is stated that "company administrators regardless of how much capital share they own in the company" will also benefit from the IRNR. Therefore, a possible interpretation might be that a remote worker that is self-employed could create a company of which they are a director in their home country, and possibly succeed in being given the IRNR status. This is not expert advice, like everything else on this website, simply speculation on possible interpretations of the law, so we advise you to seek professional opinion on this. The contact form can be found below.
What is the level of IRNR for 2024?
The non-resident tax rate is set at 24 percent income tax on earnings of up €600,000 a year, instead of the regular resident tax of 30 percent income tax from €20,200 in gross yearly earnings up to 47 percent from €300,000. If you qualify for the reduced rate, it will be applied retroactively. Note that there are no allowances for your personal circumstances and as a result, people with spouses and children may find that they will pay less tax if they do not opt for the special regime.
What is the minimul level of income required?
The body that deals with DNV visas, UGE (Unidad de Grandes Empresas y Colectivos Estratégicos), states that you need to prove you have monthly earnings of at least 200 percent of the minimum interprofessional salary (SMI), or minimum wage. The official minimum yearly wage is 14 payments of €1,080 - an unnecessarily confusing way of stating it, which is where the doubts of teleworkers get generated from. In monthly terms, this would equate to €1,260 per month, which means you need to be earning €2,520 per month in 2023 to obtain Spain's DNV. The SMI is expected to rise in 2024 by an as yet unknown amount, but the Ministry of Labour has proposed it should be raised by four percent, which would bring the requirement to €2620.80 per calendar month. For a dependent spouse you would need an extra 75 percent of the SMI, and for each dependent child an extra 25 percent of the SMI. If your income fluctuates, as would be the case for a self-employed teleworker, the authorities have taken the average of submitted invoices for the last three months or more, in order to decide.
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