Taxes on research
Content
Research workers’ residence for tax purposes
Depending on whether or not the research worker is resident in Spain for tax purposes during the tax period in question (calendar year), they will pay tax in Spain on their worldwide income as a person liable to Personal Income Tax (IRPF) or solely on their income from Spanish sources as a person liable to Non-resident Income Tax (IRNR), without prejudice to any special provisions contained in any Double Taxation Agreement that may be applicable.
As a rule, the agreements to which Spain is a party usually contain an article relating to academic staff and research workers.
Generally speaking, remuneration received by academic staff or research workers resident in one State who move to another State to engage in teaching or research activities is exempt from tax in the State in which they are pursuing those activities, for a maximum of two years. In some cases, there is a requirement that the lecturer or research worker must have moved at the invitation of the government of one of the States, a university or an official research centre. In other cases, only remuneration received from sources outside the host State is exempt from tax in that State.
Research workers from countries with Double Taxation Agreements
The provisions of the applicable agreement relating to academic staff and research workers must be consulted in order to determine the power of each State to tax the remuneration they receive as a result of their teaching or research activities and, where appropriate, the measures applicable in order to avoid double taxation.
If the agreement allows Spain to tax the income in question, it will be taxed in accordance with the domestic tax regulations, depending on their place of residence for tax purposes.
Generally speaking, in cases of double taxation, it would be for the State of residence for tax purposes to decide on the measures to be applied. In specific cases, the agreement may provide for an exemption for remuneration received in the country of residence, although this would be on a progressive basis, meaning that the exempted income would be added to the person’s remaining income in order to calculate the rate of tax applicable to their remaining income.
Where an agreement is applicable, the specific agreement must always be consulted, because it may contain special provisions.
Countries without Double Taxation Agreements
Where no agreement is applicable, research workers’ remuneration will be taxed in accordance with the domestic tax regulations, depending on their place of residence for tax purposes.
Exemptions for research grants
Regardless of where the research worker is resident for tax purposes, research training grants, including the following, are exempt from taxation:
- Public authority grants and those provided by not-for-profit organisations and banking foundations for research falling within the scope of Royal Decree 63/2006 of 27 January approving the Statute of Research Staff in Training, provided that the research aid programme has been recognised and entered in the General Register of Research Aid Programmes. Under no circumstances will monies paid under an employment contract be considered as a grant.
- Grants provided by the aforementioned not-for-profit organisations for research purposes to civil servants and other persons employed by the public authorities and to university teaching and research staff.
In addition, in the case of research workers not resident in Spain, the following are also exempt from Non-resident Income Tax: grants and other monies paid by the Spanish public authorities under international cultural, educational and scientific cooperation agreements and conventions or under the Annual International Cooperation Plan approved within the Council of Ministers.
