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The short answer
A Spanish company or self-employed professional that pays a non-resident for income taxable in Spain must withhold non-resident income tax (IRNR) and declare it on Modelo 216. Under Spanish law, services used in Spain can be Spanish-source even when the work is done in Lagos, but Spain and Nigeria have a tax treaty in force, and with a Nigerian residence certificate the treaty can remove or reduce the Spanish tax.
Who must withhold
The Agencia Tributaria's page on IRNR withholding lists the payers obliged to withhold on income subject to non-resident tax. They include entities resident in Spain (an SL or SA) and individuals resident in Spain who carry on an economic activity (an autónomo paying a supplier for the business). The withholding is reported and paid with Modelo 216, and the annual summary of those withholdings is Modelo 296.
A private individual paying a Nigerian tutor for their child is not withholding as a business. A Barcelona agency paying a Nigerian developer is.
Is the payment Spanish-source in the first place?
Withholding applies only to income that Spanish law treats as obtained in Spain. AEAT's page on income obtained in Spain (updated June 2025) gives the main tests for someone without a permanent establishment:
- Business income is Spanish-source if the activity is carried out in Spain.
- Services are Spanish-source if they are used in Spanish territory; where a service serves a Spanish activity only in part, only that part counts.
- Employment income is Spanish-source if the work is done in Spain.
- Payments for international sales of goods are not Spanish-source.
The 'used in Spain' rule is the one that surprises people. A logo designed in Ibadan for a company that trades in Seville is a service used in Spain under domestic law, even though the designer never travels. So the domestic answer is often that withholding applies. The treaty can change that answer.
What the Spain–Nigeria treaty changes
Spain is one of the countries with which Nigeria has a double tax treaty in force: the FIRS information circular on claiming treaty benefits (May 2022) lists Spain among Nigeria's 16 treaties, and PwC's Nigeria summary (May 2026) shows Spain among the countries with reduced 7.5% rates on dividends, interest and royalties. Under the usual treaty pattern, business profits of a Nigerian enterprise with no permanent establishment in Spain are taxable only in Nigeria, which would mean no Spanish withholding on an ordinary services fee. Read the convention's articles on business profits, permanent establishment and royalties, or ask your asesor, before relying on that for a particular type of payment. Software licences, for example, may be treated as royalties rather than services.
To apply a treaty, the payer needs evidence that the contractor is resident in Nigeria for tax purposes. In practice that means a certificate of tax residence issued by the Nigerian tax authority (the Nigeria Revenue Service, NRS) for the period of the payments. Keep it on file with the invoice; without it, apply domestic withholding.
A worked example
Illustrative only. A Madrid SL pays a Lagos-based contractor €3,000 a quarter for user-interface design used in its Spanish business.
- Domestic law: the service is used in Spain, so it is Spanish-source and, without more, the SL withholds IRNR at the rate on AEAT's tipos de gravamen page and pays the contractor the net amount.
- Treaty: the contractor sends a current Nigerian certificate of tax residence. If the payment is business profit with no Spanish permanent establishment, the SL can pay the full €3,000 and report the payment as exempt under the treaty.
- Either way, the SL keeps the invoice, contract, proof of payment and certificate, and reports the operation on Modelo 216 and Modelo 296 as AEAT's instructions require.
If you agreed a fee 'net of all taxes' and then withhold, you are effectively grossing the payment up: the Spanish tax comes out of your pocket, not the contractor's. Agree in the contract who bears any withholding.
Filing and records
Modelo 216 is filed on AEAT's calendar for the model, with Modelo 296 as the annual summary. Check the current periods and deadlines on the model pages in the AEAT sede before your first filing, and set up a schedule so that a new contractor does not slip through. A treaty exemption still needs to be supported if AEAT asks, so file the residence certificate with each period's payments.
Contracts that make this easier
Write the tax position into the contractor agreement: whether fees are stated gross or net, who bears any Spanish withholding, and the contractor's promise to provide a current Nigerian residence certificate each year. Add a clause allowing you to withhold if the certificate is missing. Contractors in Nigeria sometimes do not know that a Spanish client may withhold, so explaining it at the start avoids a dispute over the first short payment.
Where Pryme fits
A Pryme Business Account lets you hold euros and pay contractors in naira, with the rate and the fee shown before you approve each conversion. The Compliance agent can keep each contractor's residence certificate and expiry date with their payments and flag when a new one is needed; a person approves every payment. Verifiable receipts give you a record anyone can check. See also contractor or employee and the Spain–Nigeria tax treaty.
Questions people ask
Do I have to withhold tax when I pay a Nigerian freelancer from Spain?
If you pay as a business and the service is Spanish-source (for example used in Spain), domestic law requires IRNR withholding on Modelo 216, unless the Spain–Nigeria treaty removes or reduces Spanish tax and you hold a Nigerian residence certificate.
Is there a tax treaty between Spain and Nigeria?
Yes. FIRS lists Spain among Nigeria's treaties in force, and PwC shows a reduced 7.5% treaty rate for dividends, interest and royalties.
What document does a Nigerian contractor need to avoid Spanish withholding?
A certificate of tax residence issued by the Nigerian tax authority (NRS) for the relevant period, which supports applying the treaty.
What is Modelo 296?
The annual summary return of non-resident withholdings that a payer files alongside its periodic Modelo 216 returns.
Sources
- Agencia Tributaria: IRNR, retenciones (page updated 26 Sep 2024) · accessed Oct 2026
- Agencia Tributaria: IRNR, rentas obtenidas en España (page updated 18 Jun 2025) · accessed Oct 2026
- FIRS Information Circular 2022/15 on claiming tax treaty benefits (11 May 2022, KPMG copy) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, withholding taxes (reviewed 29 May 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.