The following types of income obtained by nonresidents other than through a permanent establishment are exempt from nonresident
income tax:
section 14 5/2004 Non-residents Tax Act

1. Income which, in accordance with Income tax regulations, is exempt (except for income referred in letter “y” of article 7 of the Income Tax Act) and which is received by individuals, such as:

- Lottery winnings, betting and draws
Winnings from lotteries and betting organized by the State Public Lottery as well as draws organized by the Spanish Red Cross and by the National Organization for the Blind ONCE
- Scholarships and grants
- Pensions recognized by Social Security as a consequence of absolute permanent disability or severe disability or for retired public servants as a consequence of being unfit for work or permanent disability.- Lottery winnings, betting and draws


2. Interest and capital gains derived from financial and other movable assets obtained by residents of other EU States or by permanent establishments of those residents of another Member State of the EU with three exceptions:
- Those obtained through a 'tax haven'
- Net gains derived from the transfer of stocks, shares or other ownership rights in an organization which main assets are real estate located in Spain.
- Net income derived from the transfer of stocks, shares or other ownership rights in an organization when the taxpayer, at any moment during the previous 12 months, has directly or indirectly owned at least 25% of this organization's capital or assets.

3. Income derived from National or Public Debt, except income obtained through a tax haven

4. Income and capital gains derived from securities issued in Spain by nonresidents.

5. Interest of nonresident accounts. For the sole purpose of waving the withholding on interests of nonresident accounts, the nonresident individual or organization may provide the financial institution with a certificate issued by the Tax Authority of the country of residency or with a formal self statement declaring they are residents of another State for tax purposes.
In addition, the ”Spanish National Bank and the registered organizations that provide nonresident accounts in Spain under the laws of financial transactions abroad, are obliged to file Form 291 "Nonresident income tax - Report of income paid to nonresident accounts", with the aim of providing information about these accounts to the Tax Administration.

6. Benefits distributed by auxiliary companies resident in Spain to their parent companies resident in another Member State of the EU or to the permanent establishment of the parent company located in other Member States, provided that they meet specific conditions.
A company is considered a Parent company when it owns a direct stake of at least 20% in the capital of another company.
(This percentage will be 15% from January 1, 2007 and 10% from January 1, 2009). The controlled company is known as the subsidiary. For this exemption to be applicable the parent company must not have its residence or the permanent establishment must not be located in a country or territory defined as a tax haven

7. Income derived from the transfer of securities or the reimbursement of shares in mutual investment funds in official secondary markets of Spanish securities, obtained by individuals or organizations that are resident of a country that has signed a Tax Agreement with Spain containing a clause for information exchange, except when it is obtained through a tax haven

9. Scholarships and other amounts received by individuals, paid by Public Administrations, by virtue of international cultural, educational and scientific agreements or treaties or by virtue of the annual international co-operation plan approved by the Spanish Cabinet (Consejo de Ministros).

10. Income from lease, cession or assignment of containers or bareboat ships and aircraft, used in international maritime or aerial navigation.

11. Dividends and shares of profits obtained by individuals that are resident in another Member State of the European Union or in countries or territories with which there exists an effective exchange of tax information, with a limit of 1,500 euro per calendar year. This exemption is not applicable to the dividends obtained through a tax haven.