12 September 2007

Relevant Events

Spain is among the countries with lower income tax for top level executives, a report by Ernst & Young said. Using data from 2006, the study compares tax charges for foreign executives who work in China, United States, Germany, United Kingdom, France, Italy, The Netherlands and Spain.

Foreign executives who become fiscal residents in Spain are taxed at 25% (24% for 2007) and are required to declare only income generated in Spanish territory. Regular Spanish taxpayers, however, pay taxes on their world-wide income, and their personal income tax can reach up to 46% in 2006 (43% in 2007 because of the fiscal reform).

Spain, The Netherlands, United Kingdom and France have set up special tax regimes for expatriates to attract qualified professionals. In Spain, this regime started in 2004 and benefits people who become fiscal residents due to a work contract in the country.