New Benefits for the Non-Resident Personal Income Tax

Through its judgements of 29 October and 3 November 2025, the Spanish Supreme Court confirms that non-residents may benefit from the joint limit rule set out in the Wealth Tax (IP) Law, thereby potentially obtaining a reduction in their IP liability. 

Please bear in mind that, under this joint limit rule, the sum of Personal Income Tax (IRPF) and Wealth Tax (IP) may not exceed 60% of the taxpayer’s total income. If this threshold is exceeded, the IP liability may be reduced accordingly, provided that such reduction does not exceed 80%. 

Until now, this rule had only been applicable to Spanish tax residents. The Supreme Court considers that this difference in treatment with respect to non-residents is discriminatory and contrary to the principle of free movement of capital. 

As a result of these judgements, and depending on the specific circumstances, non-resident taxpayers may now be able to request refunds of amounts paid in previous years and reduce their IP liabilities in future fiscal years.