As of 1 January 2004 non-resident expatriates who take up residence in Spain, can in certain circumstances and under certain conditions opt for the application of a special tax regime (Article 9, paragraph 5 of the Personal Income Tax Act). Such taxpayers may for a period of 6 years (including the year of arrival) opt to be taxed as a non-resident taxpayer.
This entails taxation at a flat rate of 25%, only to be applied on Spanish source income. Conditions are inter alia that the taxpayer has not been resident in Spain during a period of 10 years before taking up residence in Spain, and that work will effectively be carried out in Spain.
Further details are to be resolved and published by the Spanish Government.