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When am I considered to be a Tax Resident in Spain?

Spanish tax residency rules

Clients often tell us “I’m not Tax Resident in any country”. It is a serious mistake to think one is not a tax resident, because when you least expect it, the Spanish Tax Agency, or that of any another country can claim taxes from you as a resident, and bearing in mind that there is usually a 4 year expiry period, if you are asked to make tax returns for the last 4 years for your entire worldwide income, it can involve a large sum of money, plus interest and even fines for concealing information.

When does Spain consider an individual to be a Tax Resident in this country? The reply in some cases can be complicated, but we will try to shed some light on this question.  There are three basic criteria:

  • Continuous stay in the country
  • Economic ties
  • Personal ties

In the first place, continuous stay for more than 183 days of a calendar year in Spain, taking into account that “occasional absences” (such as holidays) are not counted for calculating this period, unless the taxpayer demonstrates his or her tax residence in another country. Furthermore if someone lives in any country considered by Spain to be a “tax haven”, then the Tax Administration could ask for evidence of living in that country for the same 183 day period in a calendar year.

Secondly, we would mention the economic ties, which Spain takes as being any country where a person has the base or core of his or her economical activities or interest, whether directly or indirectly. This can be a double-edged sword, but it is usually interpreted as the place from where at least 51% of your income is produced, or even the place from where you run your business, even if none of your companies are located in that country. It is even defined as being the place where economic, financial or business decisions are made.

Lastly, there are the personal ties, which mean the following: if your spouse (from whom you are not legally separated) and any children who are minors and are financially dependent on you, have their regular residence in Spain, then you are also considered to be a Tax Resident in Spain, unless there is evidence to the contrary.

All of this means that, in the first two cases there is no evidence to the contrary, i.e. if you are in Spain for more than 183 days or if your business interests are based in Spain, then you are considered a Tax Resident in Spain, unless, of course, you can present a “Tax Residence Certificate” from another country, in which case there is proof that you are not Tax Resident in Spain. You will note that we say “or” and not “and”, that is to say, it is enough to meet any of these requirements, you do not need to meet both at the same time in order for the Inland Revenue to consider you as a tax resident.

As for meeting the third requirement, if your spouse and children live in Spain and, for example, your children go to a school on the Costa del Sol, then the Inland Revenue will consider you to be a Tax Resident; this is an automatic assumption that can be reversed if you demonstrate that, in spite of them living here, you live in another country and travel to see them from time to time.

Once you are Tax Resident in Spain it is important to know that if the taxpayer moves to a tax haven, you may be considered a Tax Resident in Spain during the year when the change took place and the following four financial years, and in this way you would continue to be linked with Spain for tax purposes, with the consequent obligations. This rule can be avoided by going to live for a year in a country with which Spain has signed a double taxation agreement, i.e. by going to live in a country not considered a tax haven by Spain and then moving to the country you wish, because the first year will have served to cut the tax ties with Spain.

How is a solution found for conflicts regarding tax residence? It is sometimes really difficult to demonstrate tax residence in one country or another; in fact, if the pickings are juicy, both countries could consider you a Tax Resident. In these cases, in order to prevent double taxation there are mechanisms for settling disputes, always based on the existence of an agreement between States. The following rules are normally applied between two countries for establishing residency, in the following order:

  1. An individual shall be deemed to be a resident in the State where he or she has a permanent home available[1]. If there is no permanent home, or in the case of having a home in both countries:
  2. Where he or she has the closest personal and business ties. For example, the children’s school, the golf club, the gym, or the Church you attend.
  3. Failing the above, where you have your usual residence, even if this is not for 183 days of the calendar year.
  4. The fourth criterion for establishing residence is If it cannot be determined by any of the previous points, you will be resident in the country of which you are a citizen. And if you are not a citizen of either of the countries in dispute? We will then go to the fifth point.
  5. Finally, it will be established by mutual agreement between States.

It is seen that on occasions, determining tax residence can reach unimagined extremes, this is why it is important to have good tax planning, because the obligations arising from being a Tax Resident in a country are usually numerous, and most require you to pay tax on your worldwide income. We even know of some countries that do not even issue tax residence certificates that the Spanish Tax Agency could accept as being valid.

What to do when a country does not issue a Tax Residence Certificate? In these cases a solution has already been given by the General Directorate of Taxes in its reply to the consultation number 0665-13, stating that the Inland Revenue could then accept any evidence demonstrating tax residence in another country, even if without a certificate. However, it should be said that in practice, the Inland Revenue takes the stance that most interests it, denying the validity of evidence or simply not accepting it as valid.

The type of proof that does not usually fail is to register with the corresponding embassy and show a passport demonstrating entry and exit from the country, but each case is individual, and should be considered as unique.

Finally, we would stress that a residence permit is not the same as tax residence.

It is clear that all this legislation can be interpreted differently and especially be given different applications. What is essential is to plan your movements from a tax point of view when paying taxes in one country or another, and for this, always contact a professional.


Note: [1] The Spanish Tax Authorities consider a permanent home in practice to be one where you might live at any time, i.e. one that you have ready for occupation without prior preparation. You have sheets, towels, kitchen utensils, domestic appliances, etc.

10 thoughts on “When am I considered to be a Tax Resident in Spain?

  1. Bartel says:

    Hi – if i would move with my family to Spain in September to live permanently, would i still be considered tax resident for that year, or only for the following year?

    • Ruiz Ballesteros Abogados y Asesores Fiscales says:

      Dear Bartel,

      Thank you very much for reading our blog and trusting RB ABOGADOS Y ASESORES FISCALES and its professionals.

      As indicated in our article, the Administration will presume that you are a tax resident in Spain when you stay more than 183 days in the calendar year. Therefore, in your case, this requirement does not seem to be fulfilled.

      However, you should bear in mind that there are other factors that determine tax residency in Spain according to the Double Taxation Treaties between Spain and other countries. If you wish, you can contact us at [email protected] to provide us with more details and we will send you our proposal for the professional services you request.

    • Ruiz Ballesteros Abogados y Asesores Fiscales says:

      Dear Val,

      First of all thank you for your comment in our website.

      Regarding your question, the Spanish Tax Administration can obtain the information it needs from different sources, both in Spain and abroad, to find out how many days a person has been in one country or another.

      It may be more or less costly to obtain information from other countries. With European Union countries there is an automatic exchange of information on some matters; with others it is possible to request such information through the Double Taxation Convention, depending on the country and the tax to be treated.

      Thank you,

  2. Geof Harrison says:

    for capital gains tax reasons i need to know what is classed as my first day in spain. the day i signed for my house ,the day i moved in, the day i got my padron or the day i got my residentia card. thanks in advance.

    • Ruiz Ballesteros Abogados y Asesores Fiscales says:

      Dear Mr. Harrison
      We would need more information to answer your query. We would have to ask you for documentation for our study. If you are interested we can provide you a budget. You can contact with us in [email protected] and telephone +34 779 874

  3. Bill says:

    I will have a nonlucrative visa shortly. I am on a yacht and will be visiting several Mediterranean countries. When will I become liable for VAT on my yacht? After 183 days in Spain?

    • Ruiz Ballesteros Abogados y Asesores Fiscales says:

      Dear Bill

      Thank you for your comments and following our blog

      With regards to your question, Spanish tax residency can be considered by several ways (i) staying in Spanish territory more than 183 days in a year (ii) having in Spain the core of your economic activities or businesses and (iii) as a presumption, having in Spain your wife/husband not legally separated and your underage children. In your case, in order to determine whether you may be considered Spanish tax resident or not, we would have to analyse all your circumstances: if you have a tax residency certificate issued by any other country, your businesses location, the way you stay in Spain in your yatch, if your trips around other Mediterranean countries are considered occasional absence, and so on.

      In any case, you can contact us at our office phone (+34) 952 77 98 74 or you can give us your contact details and we will contact you in order to have a better understanding of your case and to provide you with a fees proposal [email protected]

      Thanks in advance

  4. Valerie Keating says:

    I see this is an old post, so I’m not sure if you are still looking at comments, but…I have been searching hard to find out if a US citizen in Spain under a student visa is considered a tax resident in Spain. I am the student, my husband is here as my family member, we might be here more than 183 days,and we have investment income from the US. Anything you can do to help me find an answer would be greatly appreciated!

    • Ruiz Ballesteros Abogados y Asesores Fiscales says:

      Dear Valerie,

      Thank you for your comment in our blog.

      Regarding your question: the law indicate that you will be consider as fiscal resident in Spain if you are here for more than 183 days per natural year, then, for your text, it seems that you and your husband will be consider as fiscal resident in Spain, it means that you are obligated to declare all your incomes around the world in Spain, and you can reduce in some taxes that you have paid in other countries if the Treaty of double taxation is applicable with this other country.

      If you need to do your personal income tax in Spain we can give you a budget to do it. ([email protected] – Telephone +34 952 779 874)

      Kindest regards,

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