Can non-residents deduct the €2,000 employment expense in Spain? What the TEAC has confirmed

If you work or have worked in Spain without being a tax resident, you probably know that your employer withholds income tax from your salary. Many non-residents file Modelo 210 to claim back the excess withholding, and when they do, they apply the same €2,000 flat deduction for "other employment expenses" that Spanish residents use. The problem is that the Spanish tax authorities have been rejecting that deduction, and recently the Central Economic-Administrative Tribunal (TEAC) confirmed that they are right to do so.

In this article you will learn what the TEAC decided, why the rules are different for non-residents, which expenses you can still deduct, and what steps to take if you earn or have earned employment income in Spain.

Quick answer

No. Non-residents cannot deduct the flat €2,000 "other expenses" amount that Spanish residents deduct from their employment income. The TEAC ruled on 23 June 2026 that this deduction does not meet the requirements of the non-resident income tax law (IRNR), which demands that every expense be real, documented and directly linked to the work performed in Spain. Non-residents can, however, deduct expenses that are actually incurred and properly documented, such as Social Security contributions withheld from their salary.

What did the TEAC decide?

The facts of the case

The taxpayer was a German resident who earned employment income in Spain during 2021 from a Spanish company. He filed Modelo 210 to request a refund of the excess withholding tax on his salary. In his return, he declared gross employment income, deductible expenses and withholdings. Part of the expenses he claimed included a proportional share of the €2,000 flat deduction under Article 19.2.f) of the Spanish Personal Income Tax Law (LIRPF). This is the same deduction that every Spanish tax resident applies automatically when calculating their net employment income, without needing to justify any specific cost.

Why the Agencia Tributaria reduced the refund

The tax office opened a verification procedure and asked the taxpayer for several documents: a tax residency certificate from Germany, a withholding certificate from his employer, proof of bank account ownership, a letter from his company confirming the professional reason for his assignment in Spain and its dates, and his payslips for 2021.

After reviewing the documentation, the Agencia Tributaria accepted the expenses that were actually proven in the employer’s withholding certificate, such as Social Security contributions. However, it rejected the €2,000 flat deduction. Its reasoning was clear: Article 24.6.1.a) of the Non-Resident Income Tax Law (TRLIRNR) allows EU and EEA residents to deduct employment expenses, but only if the taxpayer can prove that those expenses are directly related to the income earned in Spain and have a direct and inseparable economic link to the work carried out in Spain.

The taxpayer disagreed. He filed an appeal (recurso de reposicion) and later a formal complaint (reclamacion economico-administrativa), arguing among other things that the Agencia Tributaria's own telephone information service had told him the deduction was valid.

Why the TEAC confirmed the Agencia Tributaria's position

The case reached the Central Economic-Administrative Tribunal (TEAC), which ruled on 23 June 2026 (resolution RG 00/01768/2023). The TEAC agreed with the Agencia Tributaria and dismissed the taxpayer's claim. It confirmed that the €2,000 flat deduction under Article 19.2.f) LIRPF does not meet the requirements of Article 24.6.1.a) TRLIRNR, because it is a fixed, global amount that does not correspond to any real, documented expense directly linked to work performed in Spain.

How does the €2,000 deduction work for Spanish residents?

Under Article 19.2.f) of the LIRPF, every Spanish tax resident who earns employment income can deduct €2,000 per year as "other expenses" when calculating their net employment income. This deduction is automatic. It does not require any receipt, invoice or justification. It applies to every worker simply because they earn a salary.

This is a key point. The €2,000 is not tied to a real cost. It is a fixed, lump-sum benefit built into the personal income tax system. The Spanish tax administration never asks a resident to prove what those €2,000 were spent on, because the law does not require it.

Why is it different for non-residents?

EU and EEA residents: only proven expenses directly linked to work in Spain

When a non-resident from an EU or EEA country earns employment income in Spain, Article 24.6.1.a) of the TRLIRNR allows them to deduct expenses from their taxable base, but under stricter conditions.

The law says that the taxpayer must prove two things:

• the expenses are directly related to the income earned in Spain
• they have a direct and inseparable economic link with the work performed in Spain.

This means that the deduction is not automatic. It is not enough that a certain expense appears in the IRPF list. Each expense must be real, documented and connected to the specific work done in Spain. A fixed amount that the law grants to everyone regardless of their actual costs does not satisfy those requirements.

That is exactly what the TEAC concluded. Even though the IRNR law refers to the IRPF to identify which expenses are potentially deductible, it adds an additional requirement: the proof of a direct link. An amount that is "fixed globally and vaguely, that does not correspond to expenses actually incurred and that cannot be documented" fails that test.

Non-EU residents, including the UK: taxed on gross income

For non-residents from countries outside the EU and EEA (including the United Kingdom since Brexit), the general rule under Article 24.1 of the TRLIRNR is that the taxable base is the gross amount of the income. No employment expenses are deductible at all, unless a Double Taxation Agreement between Spain and the country of residence provides otherwise.

This means that a UK resident who earns a salary in Spain is taxed on the full gross amount, without any deduction for Social Security, professional fees or any other cost. The special rule that allows EU/EEA residents to deduct proven expenses simply does not apply.

Comparison: employment expense deductions by tax residency

	Spanish resident (IRPF)	Non-resident EU/EEA (IRNR)	Non-resident outside EU/EEA (e.g. UK)
€2,000 flat deduction	Yes, automatic, no proof needed	No: TEAC confirmed it does not apply	No
Social Security contributions	Yes, fully deductible	Yes, if shown on withholding certificate	No (taxed on gross income)
Other documented expenses	Yes, within IRPF limits	Yes, if directly linked to work in Spain and documented	No (unless the Double Taxation Agreement provides otherwise)
Proof requirement	Not required for the €2,000	Mandatory for every expense	N/A

Which expenses can a non-resident worker still deduct?

Even though the €2,000 flat deduction is off the table, EU and EEA residents can still deduct employment expenses that meet the conditions. The key is that each expense must be real, documented and directly connected to the employment income earned in Spain. In practice, the most common deductible expenses are:

• Social Security contributions withheld from the salary in Spain, as shown on the employer’s withholding certificate.
• Mandatory contributions to professional bodies (colegios profesionales), if membership is legally required for the job.
• Legal defence costs arising directly from a dispute with the employer, up to €300 per year.

All of these are expenses that can be documented, that correspond to real amounts actually paid, and that are directly linked to the work performed in Spain. That is why the tax office accepted the Social Security contributions in the case reviewed by the TEAC, while rejecting the flat €2,000.

What does this mean if you have worked or work in Spain as a non-resident?

If you are claiming a refund of withholding tax

Many non-residents who earn employment income in Spain have more tax withheld from their salary than they actually owe. Filing Modelo 210 allows you to claim back the excess. However, if your refund calculation includes the €2,000 flat deduction, expect the Agencia Tributaria to reject it. The TEAC has now confirmed this position twice. When preparing your return, calculate your deductible expenses using only the amounts you can actually prove with documentation.

If you already deducted the €2,000 in a previous Modelo 210

If you filed a Modelo 210 in previous years and included the €2,000 flat deduction, the tax office may open a verification procedure and adjust your return. In the case reviewed by the TEAC, the Agencia Tributaria opened the procedure within months of the filing. If an adjustment reduces your refund or results in a tax debt, you may also face late-payment interest. Reviewing past filings with the help of a tax specialist is advisable if you are in this situation.

Real examples

Example 1: a pilot living in Germany who flies for a Spanish airline

Klaus is a German resident who works as a pilot for a Spanish airline based in Madrid. He is not a Spanish tax resident because he spends fewer than 183 days a year in Spain. His Spanish employer withholds income tax from his salary at the non-resident rate, and at the end of the year Klaus files Modelo 210 to request a refund of the excess withholding.

In his return, Klaus deducts the Social Security contributions shown on his withholding certificate (€4,200) and adds the €2,000 flat employment expense. He claims a refund of €1,350.

The Agencia Tributaria opens a verification procedure. It accepts the Social Security deduction because it is a real expense, documented in the withholding certificate, and directly linked to his work in Spain. It rejects the €2,000 flat amount. Klaus’s refund drops to €730. This is exactly the pattern seen in the TEAC case.

What should Klaus do? He should file his Modelo 210 claiming only proven, documented expenses. If he has other costs that meet the conditions, such as mandatory union dues or professional licensing fees required for his role in Spain, he can include those too, provided he has the receipts.

Example 2: a UK resident on a short assignment in Spain

Sarah is a UK tax resident sent to Spain by her employer for a six-month project. Her salary is paid by the Spanish subsidiary, which withholds non-resident income tax. When the assignment ends, Sarah files Modelo 210 to recover the excess withholding.

Because the UK is no longer in the EU or EEA, Sarah cannot deduct any employment expenses at all under Article 24.1 of the TRLIRNR. Her taxable base is the gross salary. The €2,000 flat deduction does not apply, and neither do her Social Security contributions or any other cost.

How to claim your refund as a non-resident worker: step by step

If you have earned employment income in Spain and had tax withheld from your salary, you can file Modelo 210 to request a refund of the excess. Based on the documentation the Agencia Tributaria requested in the TEAC case, here is what you will typically need:

• A tax residency certificate issued by the tax authority of your country of residence, confirming that you are a tax resident there for the relevant year.
• A withholding certificate (certificado de retenciones) from your Spanish employer, showing the gross income paid and the tax withheld.
• Proof of bank account ownership, for the account where you want the refund deposited.
• In some cases, the payslips for the tax year in question.

With these documents, you can calculate your net taxable income, apply only the deductions that meet the legal requirements, and file your Modelo 210. If the withholding was higher than the tax actually due, the Agencia Tributaria will process the refund.

Would you rather we handle it for you? Get in touch at support@iberiantax.com.

Common mistakes non-resident workers make

• Applying the €2,000 flat deduction. As this article explains, it does not apply to non-residents. Including it in your return is the most likely trigger for a verification procedure and a reduced refund.
• Filing late or not filing at all. If you had tax withheld in Spain and are entitled to a refund, you have four years from the end of the filing period to claim it. After that, you lose the right.
• Not checking the Double Taxation Agreement. If Spain has a treaty with your country of residence, it may limit the tax Spain can charge on your employment income. Ignoring the treaty could mean you pay more tax than you owe.
• Missing documents. The Agencia Tributaria will ask for a tax residency certificate, a withholding certificate, payslips and often a letter from your employer. If you cannot provide these, your refund claim may be denied or delayed.

Frequently asked questions

Can I deduct the €2,000 flat employment expense as a non-resident?

No. The TEAC confirmed in June 2026 (and previously in January 2025) that this deduction does not apply to non-resident taxpayers. The IRNR requires that every expense be documented and directly linked to the work performed in Spain. A fixed, global amount that does not correspond to a real cost does not meet those conditions.

I am an EU resident working in Spain. Can I deduct expenses directly linked to my work?

Yes. EU and EEA residents can deduct expenses that are real, documented and directly connected to the income earned in Spain. The most common example is Social Security contributions withheld from your salary, which appear on the employer’s withholding certificate. Mandatory professional fees, union dues and legal defence costs may also qualify.

I am a UK resident. Can I deduct my Social Security contributions in Spain?

Under the general IRNR rules, no. Non-EU/EEA residents are taxed on gross income and cannot deduct employment expenses. However, the Spain-UK Double Taxation Agreement may limit the total tax Spain can charge on your salary. You should review the treaty or consult a specialist to check whether it applies to your situation.

I filed Modelo 210 in previous years and included the €2,000 deduction. What should I do?

The Agencia Tributaria may review those filings and adjust the refund or issue a tax assessment. The statute of limitations for tax adjustments in Spain is four years. If you are concerned, it is advisable to review your past returns with a tax specialist and, if necessary, file a corrective return voluntarily to avoid potential surcharges.

Worked in Spain as a non-resident? Let us check your Modelo 210

If you earn employment income in Spain, whether you are a pilot, an engineer on assignment, a seasonal worker or a company director, you are likely entitled to a partial refund of the withholding tax on your salary. But getting the deductions right matters. As the TEAC has confirmed, the rules for non-residents are stricter than for residents, and a mistake can mean a smaller refund, a verification procedure or even an unexpected tax bill.

At IberianTax, we help non-residents file their Modelo 210 correctly, claim only the expenses the law allows, and recover the withholding tax they are owed. Our team handles the paperwork and deals directly with the Agencia Tributaria on your behalf.

If you have questions about your employment income in Spain or want us to review a previous filing, get in touch. We are here to help.

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