Taxation, understood as the set of rules governing the relationship between taxpayers and the Tax Administration, rarely advances through sweeping reforms. More often, change takes place quietly: consolidated criteria, refined interpretations, and technical clarifications that require adjustments in how things are done. For this reason, practical guidance focused on criteria, thresholds, and formal requirements remains especially valuable.
For those who work with companies, managers, or professionals, these adjustments are far from marginal. They directly affect tax compliance, planning, and, ultimately, the effective tax burden.
Against this backdrop, it is worth revisiting three issues that continue to generate questions in professional practice and, above all, decisions with clear economic consequences: the Special Regime for Impatriates, the accounting treatment of non-deductible input VAT on leasing instalments, and the distinction between transaction volume and net turnover (INCN). These are not “trending” topics, but areas where small conceptual errors or formal oversights can lead to the loss of tax advantages, accounting distortions, or breaches of periodic obligations.
The Special Regime for Impatriates: tax technique and planning in a single instrument
The Special Regime for Impatriates (commonly known as the Beckham regime) is a clear example of a rule that, while not new, remains decisive for specific profiles relocating to Spain. From a technical tax perspective, its logic is relatively straightforward: the taxpayer becomes a tax resident in Spain and therefore subject to Personal Income Tax (IRPF), but opts to be taxed under the rules applicable to Non-Resident Income Tax (IRNR).
In other words, resident status is maintained for formal purposes. At the same time, a tax framework more typical of non-residents is applied.
This design produces two key practical effects. First, the scope of taxation: as a general rule, only income obtained in Spain is taxed, without the automatic inclusion of worldwide income that applies under the ordinary IRPF regime. Second, the level of taxation: instead of progressive personal income tax rates, the taxpayer is subject to fixed rates that may be significantly more competitive in practice.
The regime applies in the tax year in which tax residence is acquired and in the following five years. This makes it a medium-term planning tool, accompanying an entire professional or business phase and affecting remuneration structures, incentives, and capital allocation decisions.
However, the regime is not triggered merely by relocating. Specific requirements apply to limit its subjective scope and prevent indiscriminate use. In particular, the individual must not have been tax resident in Spain during the five tax periods prior to the move. In addition, the relocation must arise from a qualifying event: an employment contract, appointment as a director, the performance of an entrepreneurial activity, or certain highly qualified professional activities, especially those linked to emerging companies or R&D&I projects.
From a tax perspective, the regime distinguishes two broad categories of income, requiring an analysis by type rather than solely by amount. The first category includes dividends, income from equity participation, interest, and other income from the transfer of capital to third parties, as well as capital gains on the transfer of assets. These items are taxed at rates ranging from 19% to 28%. The second category covers other income, such as employment or business income, taxed at 24% up to €600,000 and at 47% on the excess.
The regime also incorporates limitations that must be factored into tax strategy. For example, income cannot be offset against other income categories, which breaks with the usual logic of a general personal income tax. Exemptions under the IRNR generally do not apply, except for certain benefits in kind derived from employment. Moreover, although the taxpayer is taxed as a non-resident for personal income tax purposes, they remain a tax resident for other taxes, such as Inheritance and Gift Tax. This requires a holistic view of the individual’s overall tax position, not just their income tax treatment.
Finally, procedural aspects are just as important as the tax benefit itself. The regime requires an explicit election, made by filing Form 149 within six months of the start of the activity recorded with Social Security, or by providing an equivalent supporting document. The annual return is filed exclusively by electronic means using Form 151. The message is clear: a technically attractive regime can be lost due to a missed deadline or inadequate relocation documentation.
Non-deductible input VAT on leasing: consistency between tax accrual and accounting recognition
The second issue is a classic question in applied accounting with clear tax implications: how should non-deductible input VAT on finance lease instalments be treated? Should it be capitalised as part of the asset’s cost, or recognised as an expense in the profit and loss account?
To answer this correctly, it is helpful to distinguish between two moments: the initial recognition of the asset and the accrual of VAT. In a finance lease, fixed assets are initially recognised at the fair value of the asset or at the present value of minimum lease payments, excluding VAT charged by the lessor. That VAT is not accrued upfront but is progressively accrued with each instalment.
The issue arises when part of the input VAT is not deductible, for example, due to mixed use of the asset or the performance of VAT-exempt activities. Economically, that non-deductible VAT is a cost, but the accounting question is where it should be recognised.
The Institute of Accounting and Auditing (ICAC) has confirmed an established criterion: non-deductible VAT accrued after the initial recognition of the asset should not be added to the cost of fixed assets. Instead, it must be recognised as an expense in the year in which it accrues. The underlying principle is temporal consistency: if VAT arises with each instalment. After initial recognition, it is not appropriate to reopen the asset’s valuation to include a later tax component.
In the context of leasing, the reasoning is straightforward. Although the contract is agreed at the outset, VAT accrues independently with each instalment. Therefore, each non-deductible VAT amount should be recognised as an expense of the corresponding financial year, typically in a Group 6 account (such as “Other taxes”). This ensures that the asset’s carrying amount remains unchanged from initial recognition and that depreciation reflects the asset’s economic cost without distortion from subsequent tax elements.
This criterion is complemented by a transparency requirement. When the amounts involved are significant, the accounting treatment applied must be disclosed in the notes to the annual accounts, in line with the principle of an accurate and fair view.
Transaction volume and INCN: two different metrics, two distinct sets of consequences
The third issue is a conceptual distinction with profound practical implications. In everyday practice, “transaction volume” and “net turnover (INCN)” are often used interchangeably, even though they respond to different logics and serve different regulatory purposes.
Transaction volume is a VAT-related concept. It is used to determine thresholds and the applicability of specific regimes, such as the cash accounting scheme, which may be applied if the transaction volume in the previous calendar year does not exceed €2,000,000. It also determines Large Company status when it exceeds €6,010,121.04, triggering additional formal obligations.
Transaction volume includes the total amount of supplies of goods and services carried out by the taxable person during the previous calendar year, including exempt transactions. However, certain operations are excluded, such as occasional transfers of real estate, disposals of investment goods, and certain financial transactions, whether exempt or not, when they are not part of the ordinary business activity. This definition can significantly affect the final calculation.
Exceeding the Large Company threshold (€6,010,121.04) mainly entails formal and periodic obligations: notification to the Spanish Tax Agency (AEAT) via Form 036, monthly VAT returns (Form 303), monthly withholding returns (Form 111), and mandatory inclusion in the Immediate Supply of Information (SII) system. In turn, SII inclusion exempts the taxpayer from filing certain informative returns, such as Forms 347 and 390.
INCN, by contrast, is an accounting and corporate law metric. It represents income from ordinary business activity, adjusted for returns, rebates, and commercial discounts, including prompt-payment discounts granted off-invoice. Broadly speaking, it is calculated by adding sales, services rendered, and other ordinary income, and subtracting the relevant commercial adjustments.
Its role in Corporate Income Tax is structural. INCN determines eligibility for tax incentives and special regimes, including Small Company status when INCN in the previous year is below €10 million. It is also linked to reduced tax rates: for ERDs, a 24% rate; for micro-SMEs (INCN below €1,000,000), 21% on the first €50,000 of the tax base and 22% on the remainder. INCN is also relevant for minimum taxation rules when it reaches at least €20 million in the 12 months preceding the start of the tax period.
Beyond tax, INCN affects corporate obligations, such as mandatory audits (including exceeding €5.7 million for two consecutive years) and the possibility of preparing abridged accounts when INCN does not exceed €8 million. From a strictly tax perspective, it also determines limits on offsetting tax losses and on deductions to avoid double taxation.
Confusing transaction volume with INCN is therefore not a mere semantic issue: it can lead to incorrect application of VAT regimes, non-compliance with reporting obligations, or errors in the calculation of key corporate tax parameters.
The practical value of technical precision
These three issues illustrate a typical pattern in tax law and applied accounting: advantages, obligations, and risks do not depend solely on what the rule says, but also on how it fits the specific circumstances of each case, including its requirements, thresholds, and procedural effects.
The Special Regime for Impatriates demands careful attention to eligibility criteria and deadlines; non-deductible VAT on leasing requires consistency with accrual and valuation principles; and the distinction between transaction volume and INCN requires precise handling of concepts that activate very different legal and tax consequences.
In an increasingly demanding tax environment, this level of precision is not an academic luxury. It is a core management tool.
