Income obtained by a branch in Spain of a non-resident company is subject to the general corporate tax rate, which is 25%.

Payments made by a branch to its foreign headquarters or to its permanent establishment, in the form of fees, interest, commissions or technical support fees, are not tax deductible. However, general management and administration expenses incurred by the parent company and that may be charged to the branch are tax-deductible, provided that payments are made in a continuous and rational manner, and that certain documentary requirements and formalities are met.

According to Spanish regulations, income earned by a branch that is repatriated to its headquarters is subject to a general withholding rate of 19%. This tax does not apply in the case of a permanent establishment of a company resident in the European Union, unless the company resides in a tax haven. Most of the agreements to avoid double taxation signed by Spain do not include provisions on the taxation of income repatriated by branches, so that, in these cases, the repatriation of income is not taxed. However, some double taxation treaties, such as those signed with Canada, Indonesia and the United States, do establish a tax on income repatriated by branches.