Are you fiscal resident in Spain?

The way in which individuals and bodies corporate pay tax in Spain varies depending on whether or not they are residents of Spain.

1. INDIVIDUALS

Individuals shall be deemed to have their principal residence in Spain if they meet any of the following conditions:

• They spend more than 183 days per calendar year in Spain. Occasional absences shall be taken into account to calculate the period of residence, except when said individuals prove they have their tax residence in another country. In the case of countries or territories classified as tax havens, the Spanish tax authorities may request proof of residence in the tax haven for 183 days per calendar year.

• Calculation of the period of residence shall not take into account any temporary stays in Spain that are the result of obligations arising from cultural or humanitarian collaboration agreements entered into with the Spanish public administration with no payment involved.

• Their main or central place of business is directly or indirectly located in Spain. Unless there is evidence to the contrary, an individual shall be deemed to be a resident of Spain if, in accordance with the aforementioned criteria, his or her legally non-separated spouse and dependent minor children have their principal residence in Spain.

Individuals of Spanish nationality who prove they have changed their country of residence to a tax heaven shall continue to be liable for Personal Income Tax (IRPF) in Spain for the tax period in which the change of residence occurs and the following four tax periods. An individual shall be deemed to be a resident or non-resident for the entire calendar year, given that a change of residence does not give rise to an interruption of the tax period.

Proof of tax residence

Tax residence shall be proven by means of a certificate issued by the competent tax authority in the country in question. This certificate shall be valid for one year. An individual may have a residence permit or administrative residence in a country and yet not be deemed to have tax residence there

Residence under Tax Conventions

In all agreements signed by Spain, reference is made to each country's internal legislation when defining an individual's country of residence. Given that different countries may have different criteria in this respect, an

Individual may occasionally be deemed to be a resident of two countries .In such cases; the agreements stipulate the following general criteria to avoid this possibility of an individual being deemed to be a resident of two countries:

• The individual shall be deemed to be a resident of the country in which he/she has a permanent home.

• If he/she has a permanent home in both countries, he/she shall be deemed to be a resident of the country with which he/she has the closest personal and economic ties (centre of vital interests).

• If the situation cannot be determined in this way, he/she shall be deemed to be a resident of the country in which he/she usually lives.

• If he/she habitually lives in both countries or neither of them, he/she shall be deemed to be a resident of the country whose nationality he/she holds.

• Finally, if he/she is a national of both countries or neither of them, the competent authorities shall endeavour to settle the question by mutual agreement.

2. BODIES CORPORATE

A body corporate shall be deemed to be a resident of Spain if it meets any of the following conditions:

• It was incorporated in accordance with Spanish law.

• It has its registered office in Spain.

• It has its effective headquarters in Spain.

A body corporate shall be deemed to have its effective headquarters in Spain if management and overall control of its activities are based in Spain. If there is a change of residence, the tax period shall end when this change occurs.

Proof of tax residence

A body corporate shall provide proof of its tax residence in a country by means of a certificate issued by the competent tax authority in the country in question. This certificate shall be valid for one year.

 

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