I.- Introduction.
On 1st January 2015 the modifications introduced by Law 26/2014, from November 27th, which modifies Law 35/2006, from November 28th, concerning Income Tax, entered into force in Spain.
Among said modifications it is important to highlight those related to the new withholding tax percentages applicable to company directors’ remuneration, which are lower than the percentages applied during the last three years.
II.- New withholding tax percentage.
Since 1st of January 2015 the Spanish withholding tax percentage on a company director’s remuneration has decreased from 42% to 37%. As from 1st of January 2016, said percentage will be further reduced to 35%.
Notwithstanding the above, whenever the remuneration is paid by an entity whose net sales figure in the previous fiscal year is below 100,000 Euro, the applicable withholding tax percentage during the year 2015 shall amount to 20%. As from 1st of January 2016, said percentage will be further reduced to 19%.
Additionally, the withholding tax percentages are halved whenever the remuneration has been obtained in Ceuta or Melilla always provided that the requirements set forth in article 68.4 of the Spanish Income Tax law are met.
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2nd January 2015
