A taxpayer, resident in Spain, carries out his professional activity both in Spain and in the United Kingdom, making payments on account in both states.
They are therefore obliged to make payments on account in both states. Being a resident in Spain, he wonders whether, in the fractioned payment to be made in Spain itself, he can deduct the withholdings paid in the United Kingdom during the quarter.
Amount of the instalment
With regard to the amount of the instalment, article 110 of the Personal Income Tax Regulations, approved by Royal Decree 439/2007, of 30 March (BOE of 31 March), hereinafter RIRPF, establishes:
"The taxpayers referred to in the foregoing article shall pay, in each term, the following amounts:
a) For the activities that were in the direct estimation method, in any of its modalities, 20% of the net yield corresponding to the period of time elapsed from the first day of the year to the last day of the quarter to which the fractioned payment refers.
The amount resulting from the application of the provisions of this point shall be reduced by the instalments which, in relation to these activities, would have been due in the previous quarters of the same year had the provisions of paragraph 3(c) of this Article not been applied.
(…)
2. The percentages indicated in the previous section shall be divided by two for the economic activities that are entitled to the deduction in the quota provided for in article 68.4 of the Tax Law.
2.- Deductions
From the quantity resulting from the application of the provisions of the preceding paragraphs, they may be deducted, where appropriate:
(a) the deductions made and the payments on account made corresponding to the period of time elapsed from the first day of the year to the last day of the quarter to which the instalment payment relates, where applicable:
1.º Professional activities that determine their net yield by the direct estimation method, in any of its modalities.
(…).”
3.- Conclusion
Therefore, the taxpayer will not be able to deduct, from the instalment payment to be made in Spain, the withholdings made in the United Kingdom on account of British income tax.
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