Remote Work from Spain for a Swiss Company

Are you working remotely from Spain for a company based in Switzerland and want to meet all your tax obligations and/or optimize the way you manage your taxes?
Here’s what you need to know based on a real case from Binding Consultation V0057-23 of the Spanish Directorate General of Taxes (DGT).

International remote work has opened new doors, allowing someone living in Spain to work for a Swiss company without relocating permanently.
However, this setup comes with legal, tax, and labor implications you can’t afford to overlook.

Real Case: Remote Work from Spain for a Swiss Company

To shed more light on this issue, we reference a relevant binding consultation from the Spanish Tax Authority (DGT), involving a Spanish tax resident living in Spain who works remotely in IT development for a Swiss tax-resident company.

The key question in this case is whether the income received by this person, paid by the Swiss company for remote work carried out in Spain, should be taxed in Spain.

The person specifically wants to understand how they should pay Personal Income Tax (IRPF) in this scenario.

The following assumptions apply:

• The worker is a tax resident in Spain.
• The work carried out from Spain for the Swiss (or German) company is performed as an employee.
• The work is done entirely from Spain via remote work, with no travel to Switzerland.

Regarding the paying entity (Swiss tax-resident company), special attention must be paid to Article 15 of the Double Taxation Agreement between Spain and Switzerland:

 

“1. Subject to the provisions of Articles 16, 18 and 19, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

However, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if:
a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the fiscal year concerned;
b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State; and
c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State.”

Following the general rule in Article 15.1, the income received by the worker will only be taxed in Spain unless the work is performed physically in Switzerland and the conditions in Article 15.2 are not met.

The DGT clarifies that “since the employee works from their private residence in Spain (remote work), and the output benefits a Swiss company, the employment is considered to take place in Spain (regardless of where the output is received), and thus the income is only subject to Spanish taxation.”

Taxation

Regarding taxation under Spanish law, the income received by the individual from the Swiss company is treated as employment income according to Article 17.1 of Law 35/2006 on Personal Income Tax (IRPF), which states:

“1. All monetary or in-kind compensations or benefits derived directly or indirectly from personal labor or an employment relationship, which are not classified as business income, are considered gross employment income.

This includes, in particular:
a) Salaries and wages.”

Finally, the DGT notes that as employment income, this income is subject to withholding. However, for withholding to apply, there must be a legal entity obligated to withhold.

According to Article 76 of the IRPF Regulations, since the Swiss company is not resident in Spain, it will only be required to withhold taxes if it operates through a permanent establishment in Spain. Otherwise, it will only have withholding obligations for certain types of income that are deductible for tax purposes in Spain, as outlined in Article 24.2 of the Non-Resident Income Tax Law.

Conclusion: What You Should Consider

Working remotely for a foreign company offers many benefits, but it also comes with tax, labor, and social security challenges.

An expert in international mobility can guide you through this process and help ensure full compliance with regulations in both countries.

This way, you can enjoy the advantages of remote work—without worrying about legal or administrative hurdles.

Are you considering remote work for a foreign company?

At Adlanter, we have specialists in international taxation for remote workers. Every case deserves a tailored analysis.

We can help you optimize your tax position through proper planning and expert advice.

Among other services, we can help you analyze:

• How to avoid double taxation
• Tax incentives for international mobility
• Exemptions for income earned from work performed abroad