VAT

The Value Added Tax or VAT (WA) is an indirect consumption tax, taxing three different types of actions: the provision of goods and services by companies and professionals, the acquisition of goods within the EU, and importations. VAT is borne by the ultimate user only and not by the companies or professionals. The latter collect VAT from their customers and deposit it with the tax authorities by means of tax declarations presented at the Spanish Tax Agency. In the first case, VAT is paid upon the purchase of any product or service. In the second case, VAT is paid upon the entry of goods (with the exception of personal effects) from one EU Member State to another. In the third case, VAT is paid on goods imported from third countries. There are three different types of VAT: kinds of WA: general (16%), reduced (7%) and super-reduced (4%). The super-reduced VAT rate applies to basic goods or goods of primary necessity. For more information on which goods and services belong to each category, please visit the following website: http://asesores.com/fiscal/tipiva.htm

Special taxes
Special taxes are taxes levied on the consumption of very specific goods: hydrocarbons (petrol derivatives), alcoholic drinks and tobacco. This category also includes the Special Tax on Certain Means of Transport, levied upon the registration of a vehicle. Please remember that in Spain all new and second-hand vehicles (cars, motorcycles) that are going to be used on national territory by Spanish residents must be properly registered.

Local taxes
Apart from the taxes described above, which are imposed at the national level, there are also locally levied taxes, which are set by the City Councils. The most relevant are:

• Property Tax (IBI)
Levied on the assessed value of properties (houses, flats, etc..) and payable by the property owners or holders of certain property rights.

• Vehicle Tax (IVTM)
Replaces the former motor vehicle tax (IC). It is levied on all motor vehicles that use the public road.

For more information, please consult the following address:
Spanish Tax Agency (Agencia Tributaria)
Central Services
c/ Infanta Mercedes, 37
28020 Madrid
Tel.: 91 583 70 00
Basic tax information: 901 33 55 33
www.agenciatributaria.es

Taxes
The Spanish Tax Agency is responsible for the application of the State Tax System. Their web page (www.agenciatributaria.es ) is very complete, has an English version and has a special section for non-residents in Spain.
All natural and legal persons in Spain have a tax identification number (NIF) for all dealings with the Spanish Inland Revenue. For those who do not have Spanish nationality, this number is the same as their Foreign Identification Number (NIE).

Direct and indirect taxes
The Spanish tax system has two different types of taxes: direct and indirect taxes. Direct taxes are levied on income and wealth. This category includes Personal Income Tax (IRPF), Non-Resident Income Tax (IRNR), Corporate Income Tax (IS), Succession and Donation Tax (ISD) and Wealth Tax (IP). Indirect taxes are levied on the consumption of goods and services and, in general, on the transfer of goods and rights. This category includes Value Added Tax (WA), Special Taxes (IIEE), Insurance Premium Tax (MS) and Wealth Transfer Tax (ITP).
A foreigner who comes to Spain for a limited period of time will probably have to pay IRPF or IRNR (according to his/her residence status), WA, IIEE and in rare circumstances, Wealth Tax (IP), Wealth Transfer Tax (ITP), etc...

Personal Income Tax (IRPF) and Non-Resident Income Tax (IRNR)
IRPF and IRNR are taxes levied on the income earned by private individuals according to their place of residence.

Residence
Depending on whether an individual is or is not resident in Spain, he/she must pay Personal Income Tax (IRPF) or Non-Resident Income Tax (IRNR) on the income earned.
A person shall be considered to be a permanent resident in Spain if he/she spends more than 183 days (6 months) per year on Spanish territory. Occasional absence from Spain shall also be taken into account when determining permanent residence, unless the private individual provides proof of tax residence in another country. There are however other considerations to be taken into account, such as the family's place of residence, close personal or economic ties, or the usual country of residence or employment. Individuals in this situation will have to pay Personal Income Tax (IRPF) on the total income earned worldwide. It is therefore recommended that you are well informed of your personal tax situation when working or conducting research in Spain.

Special Regime for IRNR taxation
Individuals who acquire their tax residence in Spain as a result of being transferred to Spanish territory can choose to be taxed under Personal Income Tax or Non-Resident Income Tax terms during the tax year of change of residence and during the following five tax years. This holds true for individuals:
- Who have not been resident in Spain during the ten years prior to their transfer to Spain.
- Whose transfer is the result of an employment contract.
- Whose employment activities are carried out in Spain and for a company or organisation with residence in Spain or for a permanent establishment in Spain of an organisation that does not have residence on Spanish territory.
- Whose returns generated by the activities performed under the labour agreement are not exempted.

Agreements to avoid double taxation
If the researcher is resident in a country that has entered into an agreement with Spain to avoid double taxation, the provisions of this agreement will apply, given the fact that in some cases – in light of specific circumstances – income cannot be subject to taxation in Spain. In these cases, the non-resident researcher will have to prove that he/she is residing in a country that has entered into an agreement with Spain by producing a certificate issued by the Authorities of the country concerned.
For more information on the different types of agreements and an overview of the countries that have entered into an agreement with Spain, please visit the web page of the Ministry of Economy and Finance:  www.mineco.es  available in Spanish and English and of the Spanish Tax Agency:  www.aeat.es  under the chapter "No Residentes".

Fellowships exempted from tax payment:

Personal Income Tax (IRPF) payers
If the researcher is paying Personal Income Tax (IRPF), his/her fellowship will be considered earned income and will therefore be subject to Personal Income Tax payment. However, in accordance with legal regulations, public fellowships and fellowships granted by non-profit making institutions under a special regime (Law 49/2002) are exempted from tax for the conduct of regulated studies, both in Spain and abroad, at all levels and grades of the education system. This provision applies to payments made on or after 1st January 2004.

Non-Resident Income Tax (IRNR) payers
However, if the researcher is paying Non-Resident Income Tax (M), the fellowships will be considered economic returns for the working activities carried out in Spain and will therefore be subject to Non-Resident Income Tax payment. This occurs whenever the economic returns are obtained through a personal activity carried out on Spanish territory or through public contributions made by the Spanish Administration. If the labour activity has been carried out exclusively abroad and is subject to payment of personal income tax outside Spain, it will be exempted from IRNR tax.

Transfer of retirement contributions
If you have worked in more than one EU Member State or in countries that have signed agreements with the EU, the different periods of retirement pension insurance will be added up in order to meet the minimum contribution period. If you are already entitled to retirement benefits and would like to submit your application, you can do this in your home country, in Spain, or in any other country, including non-EU countries, provided they have signed an agreement with the EU. The benefits paid by each insurance organisation will depend on the duration of the insurance period. This also applies to the payment of survivor pensions.
If you are residing in Spain and continue to be registered with the insurance system of your home country or any other Member State, you must continue to pay contributions in the third country. When you have reached the required age to receive a retirement pension, you can submit your application in Spain to the competent insurance organisation. The payment of non-contributory disability and retirement pensions has been transferred to the Autonomous Regions. Please contact the service and information centres of the Social Security, the Social Services of your City Council or the Ministries of Social Welfare of your Autonomous Region of residence. To locate your nearest centre, please visit the web page  www.igerontologico.com You can also contact the Government Delegations and Government Sub-delegations, visiting their web page at:  www.administracion.es  and clicking on: Organización Publica / Administración General del Estado / Organos Territoriales / Ver las Unidades, and select your current or future Autonomous Region of residence. All benefits are payable by the insurance organisation in Spain or the competent organisation of your home country.

Secretary of State for Social Security
The National Institute of Social Security (MSS) is responsible, among other duties, for the recognition and control of economic benefits rights granted by the Social Security System (at the level of contribution), including family allowances for children or foster children at charge and payments for the birth of the third and subsequent children (as well as multiple deliveries). It also recognises the right to medical care. The MSS is in charge of the management of retirement pensions, permanent disability, widowhood, orphanhood and compensation in cases of labour accidents and professional diseases, as well as benefits for temporary working incapacity, maternity or risk during pregnancy. For more information on allowances available to employees who are working and living in Spain, please visit the Social Security's web page at:  www.seg-social.es and look under "prestaciones" and "direcciones y telefonos", or visit the nearest social security office in your Autonomous Region of residence.

Non-contributory retirement and disability pensions
All retired, disabled and poor citizens are entitled to financial assistance, free medical and pharmaceutical care and social services, even though they have not contributed to Social Security, or the contributions paid are not sufficient. The non-contributory retirement pension is granted to people over the age of 65 years who are currently living in Spain and have resided in our country for at least 10 years. Disability pensions are granted to persons aged between 18 and 65 years who are currently living in Spain and have done so for at least 5 years, the last two years of which immediately prior to applying for the retirement benefits, have a level of disability of 65% or higher, and have no financial means of support.

Family allowances for children or foster children at charge
Family allowance is a financial benefit granted for each child or foster child under the age of 18 years. Eligibility is restricted to those persons whose yearly income does not exceed the limit established annually by the General State Budget Law. Family allowance is also granted to families with children over the age of 18 years with a level of disability of 65% or higher (irrespective of the family income). All Social Security affiliates are entitled to these benefits, which must be applied for at the Centre of Support and Information of the nearest Social Security Office. Foreign nationals residing in Spain are entitled to the same benefits as Spanish citizens.

Maternity
Women in Spain have three basic guaranteed rights when becoming a mother: medical care, maternity leave and financial support.

- Every woman residing in Spain (irrespective of nationality) with insufficient economic resources is entitled to free medical care during pregnancy, delivery and the postnatal period for herself and her child.

- Every employee, irrespective of gender, is entitled – if all requirements are met – to receive financial support for paternity after childbirth or adoption and to take 16 weeks of uninterrupted paternity leave. In case of biological maternity, the mother is obliged to take a 6-week maternity leave after giving birth. To qualify, the employee must have contributed to Social Security for at least 180 days (6 months) during the last 5 years. As to financial compensation, employees on paternity leave will receive 100% of their salary (based on the contributions made during the month prior to the leave). For more information, please visit the Social Security’s web site: www.seg-social.es

- Every working woman who has contributed to Social Security receives financial support from the Spanish Tax Agency (Ministry of Finance) of 100€ per month for each child under the age of three. You can download an information leaflet on maternity benefits from the web page of the Spanish Tax Agency (www.agenciatributaria.es ), by clicking on “Información tributaria”- “Otra información” –“Deducción por maternidad”, or call number: 901 200 345.

For any kind of information on women-related legal issues such as marriage, children, civil register, labour legislation, domestic violence, violation, free legal aid, etc... you can contact the Women’s Institute, dependent on the Ministry of Employment and Social Affairs:

C/ Condesa de Venadito, n° 34
28027 MADRID
Telephone: 91 363 80 00 (central)
E-mail: inmujer@mtas.es
www.mtas.es/mujer/index.html