The Spanish Tax Administration Agency (Agencia Estatal de Administración Tributaria, AEAT) mandates taxation in Spain for those serving as non-resident directors of a Spanish company. A recent tax ruling, Consulta Vinculante V2128-24, clarifies the tax treatment of remuneration of a UK-resident director who carries out his responsibilities telematically for a Spanish company.  

For context, the query involves a Spanish limited company engaged in hotel leasing. It is equally owned and administered by a French resident in Spain and a UK resident in the UK, both of whom receive remuneration for their roles. The question aimed to address the withholding tax obligations for the remuneration paid to the UK-resident director and reporting requirements for declaring these withholdings.  

Below is the summary of the applicable regulations, taxation details, filing obligations and declaration of this consultation:  

• The provisions of the Spain-UK Double Taxation Agreement (DTA), including all amendments, are relevant in this case.  

• The DTA allows Spain to tax the remuneration of the UK resident administrator, given that the company is based in Spain. 

• The remuneration is subject to withholding tax under the Spanish Non-Resident Income Tax (NRIT) at a rate of 24% of the gross amount.  

• The company must withhold this tax and file quarterly (form 216) and annual (form 296) declarations of the withholdings, including detailed information about the recipients and the amounts withheld.  

This consultation clarifies that these withholding and payment obligations apply even when the administrator or director telematically performs their responsibilities outside Spain.  

To ensure compliance with these withholdings and avoid penalties, companies must verify the administrators’ tax residence, apply the withholdings correctly and submit the tax forms by the quarterly and annual deadlines.  

For more information or any questions about this update, get in touch with our Bolder Spain representatives. To read the full text of the consultation, please click here: Queries of the D.G. Tributos: Search engine (hacienda.gob.es)  

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