Obtaining residency permission in Spain does not necessarily imply immediate taxation as a tax resident in Spain. It is crucial to understand that immigration laws and tax laws may have different requirements and criteria. In this article, we will explore the tax implications for foreigners obtaining residency in Spain and those considering doing so.
An individual is understood to have their habitual residence in Spain when any of the following circumstances occur:
1) Physical Presence:
One of the main criteria for establishing tax residence in Spain is residing in Spanish territory for more than 183 days during the calendar year (from January to December). It is important to note that sporadic absences are taken into account to determine this period of residence unless tax residence is proven in another country. This means that short trips or vacations cannot be used to exclude tax residence, as the criterion used here considers the habitual residence of the taxpayer.
2) Economic Interests:
Another important factor in determining tax residence is establishing the center of economic interests in Spain. This implies a significant connection with the Spanish economy, such as owning businesses, investments, or generating primary income in Spain.
For example, a person working for a Spanish company who constantly needs to make short business trips outside the country, spending less than 183 days in Spanish territory during the calendar year. In this case, even if the 183-day rule is not met, Spain would still be considered their tax residence, as the country is the center of their economic activities.
3) Family Relations:
The presence of a legally non-separated spouse or minor children residing in Spain may also presume the taxpayer’s tax residence. However, this presumption can be rebutted with evidence to demonstrate that tax residence is elsewhere.
Consequences of Acquiring Tax Residence:
Acquiring tax residence in Spain implies the obligation to pay taxes on all income and assets, including those outside Spain. Additionally, an individual will be considered resident or non-resident throughout the calendar year, as changing residence does not interrupt the tax period.
What about taxes already paid abroad?
If taxes on assets and rights have already been paid by the country of origin, international double taxation agreements may be applied to calculate the tax due in Spanish territory. These agreements will define how the tax will be collected and/or offset by the Spanish tax authorities.
Frequently Asked Questions about Fiscal Residency in Spain:
Question: I lived in Spain from January to August 2023, but I traveled on vacation during that period. Am I a fiscal resident?
Answer: Sporadic absences will not be taken into account to determine fiscal residency in Spain. Therefore, in this case, if you spent more than 183 consecutive or alternate days in Spain during a fiscal year (from January 1st to December 31st), you will be considered a fiscal resident, even if you traveled during that period.
Question: I own a property in Spain, but I don’t spend more than 183 days per year in the country. Am I still considered a fiscal resident?
Answer: Owning property in Spain can be a relevant factor, but it is not the only criterion to determine fiscal residency. If you spend less than 183 days in the country and do not have other significant ties to Spain, it is unlikely that you will be considered a fiscal resident. However, other factors, such as the purpose of your trips and your economic activities in Spain, may also be considered.
Question: I worked in Spain for several months but returned to my home country at the end of the year. Am I still considered a fiscal resident in Spain?
Answer: If you worked in Spain for several months and returned to your home country, you will not be considered a fiscal resident as long as your total stay in Spain does not exceed 183 days during the fiscal year.
At Sterna Abogados, we understand the complexity of legal and tax aspects related to immigration. Continue to follow our advice for a clear understanding of legal and tax matters when migrating to Spain.