►► 1.Exemptions: the exemption of the legal severances for dismissals or terminations is restricted

Effective 1st of August 2014, the tax exemption of the legal severance for dismissal or termination has a limit of 180,000 Euros.

►► 2. Special tax regime for expatriates: there is a simplification of the tax regime for employees transferred to Spain, excluding from the regime the professional sportsmen and allowing the inclusion of the administrators of companies.

Changes in the application of the special tax regime of the employees transferred to Spain:

1. It is required that they have not been resident in Spain during the ten previous years to the transfer to Spain

2. The assignment to Spain has to take place due to some of the following circumstances:

• As consequence of an employment contract, with exception of the special labor relationship of the professional sportsmen.
• As consequence of the acquisition of the condition of administrator of an entity in whose capital does not take part or, on the contrary, when the participation in the entity does not determine the consideration of linked entity in the terms foreseen in the Corporate Income Tax Law.

3. The determination of the tax debt of the PIT is made in accordance with the procedure foreseen in the Non- Residents Personal Income Tax Law for the revenues obtained without mediation of permanent establishment.

4. As transitory regime, the taxpayers who had moved to Spain before 1-1-2015 will have the choice to apply for the special tax regime in force at 31st of December 2014, applying the tax rates stated in the regulations of the Non-Residents Personal Income Tax Law in force in at 31st of December 2014. This option will have to be made in the Personal Income Tax return of the tax year 2015 and will be kept until the end of the application of the special tax regime.

►► 3. Employment Income: the general reduction is reviewed and the tax rates are modified.

The reduction of 40% for the employment income with a period of generation of more than two years and irregular, changes to 30% when they are assigned to an only tax year.

Regarding the tax rates to be applied to the employment income, the maximum tax rate (52% until now) is modified as follows:
• 2015: 47 %.
• 2016: 45%

►► 4. Economic Activities Income:

Payments on account: the general tax rate for professional activities (until now, 21 %) is modified as follows:
• 2015: 19%.
• 2016: 18%.