Short answer
If Spain has no double taxation treaty with another country, each state applies its own laws without limits. The same income can be taxed twice, but Spanish law offers unilateral relief: Spanish residents can offset the tax paid abroad through the international double taxation deduction in article 80 of the Personal Income Tax (IRPF) Law.
For a Spanish tax resident, the deduction lets you subtract from your Spanish tax the lower of two amounts: the tax actually paid in the other country on that income, or the Spanish tax due on it. This removes much of the double taxation, but not always all of it. If the other country’s rates are higher, the excess cannot be recovered. You also need official proof of payment from the other country. Corporate income tax has equivalent mechanisms (articles 21 and 31 of Law 27/2014).
For a non-resident earning income in Spain, without a treaty Spain applies non-resident income tax (IRNR) at its standard rates. These are generally 24%, or 19% for residents of the EU and the European Economic Area. There is no access to the reduced withholding rates on dividends, interest or royalties that treaties provide, and Spain can tax income that, under a treaty, would only be taxed in the country of residence, such as certain pensions or some employment income.
Other consequences
- Dual residence with no way out. Without a treaty there are no tie-breaker rules (permanent home, centre of vital interests, nationality), so a person can be treated as resident by both countries at once.
- No mutual agreement procedure. The two tax authorities have no formal procedure for resolving disputes.
- Non-cooperative jurisdictions. If the country is on Spain’s list of non-cooperative jurisdictions (Order HFP/115/2023), the consequences are harsher. A Spanish national who moves their residence there remains a Spanish tax resident that year and for the following four (article 8.2 of the IRPF Law).
According to the Spanish Ministry of Finance, Spain has 99 treaties in force to avoid double taxation on income. Even so, some countries that matter to many expats are missing, for example several in the Middle East, Africa and Latin America. That is why it is worth checking before you move, invest or receive a pension from abroad.
At Taxmind we analyse your situation when there is no treaty, apply the article 80 deduction correctly and plan your residence so that you do not pay tax twice on the same income.
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This answer is general information and does not replace advice on your particular case.