Tax Calculation

A person (Spanish or foreign) receiving money in Spain, or a Spanish person working abroad, being eligible to pay taxes in Spain, can be considered from taxes point of view as: -Resident--> Affected by IRPF "Impuesto sobre la renta de las personas físicas" -Non-resident (taxed or not taxed)--> Affected by IRNR "Impuesto sobre la renta de no residentes" -Tax exempt. This information is setup at employee level though the page "Transnational Mobility" under Maintain tax data ESP component

Payees in Spain (Spanish or foreign) and Spanish payees working abroad who are eligible to pay taxes in Spain fall into three main categories:

• Residents who are subject to Impuesto sobre la Renta de las Personas Físicas (IRPF).

• Nonresidents (taxed or not taxed) who are subject to Impuesto sobre la Renta de No Residentes (IRNR).

• Tax exempt payees.

You define the category for each payee on the Transnational Mobility page of the Maintain Tax Data ESP (GPES_PAYEE_DATA) component.

In the case of IRPF, the withholding amount originates from employee income and reductions and depends on which tax regulations are applicable to an employee. Spain does not have one single set of tax regulations for IRPF. General state tax regulations exist as well as four regions with specific tax calculations. Each tax location is known as a fiscal territory (Territorios Fiscales). An employee is associated with one fiscal territory depending on where the employee is living and working. PeopleSoft Global Payroll for Spain calculates the IRPF for all the fiscal territories:

• Hacienda Estatal (state territory).

• Hacienda Foral de Navarra.

• Hacienda Foral de Alava.

• Hacienda Foral de Guipuzcoa.

• Hacienda Foral de Vizcaya.

You assign each payee to one fiscal territory using the Maintain Tax Data page of the Maintain Tax Data ESP (GPES_PAYEE_DATA) component.

Note:

The fiscal territories Hacienda Foral de Navarra, Hacienda Foral de Alava, Hacienda Foral de Guipuzcoa, and Hacienda Foral de Vizcaya are known as historical territories.

PeopleSoft Global Payroll for Spain provides the different calculation rules and setup data for each fiscal territory. It delivers setup data using tax brackets and calculation variables. You can view and update the tax brackets and other tax data that PeopleSoft Global Payroll for Spain delivers.