Fiscal Residence

It is very important that residency is correctly determined. Residents in Spain pay taxes on their income worldwide, but non-residents are taxed only on their income within Spain.

Non-resident status can be accredited by presenting a certificate of residency in another country issued by the tax authorities of that country. The period of validity of these certificates is one year.

What happens when we have to apply the internal laws of Spain and another country as an individual is a resident of both?

In these cases, the agreement or treaty between the two countries should be consulted, if one is in place. These treaties establish rules to prevent that a person is considered a resident of both countries from a taxation viewpoint. In general, these rules state that an individual is a resident:

  1. Of the country where he or she has a permanent residence. If he or she has a permanent residence in both countries, they are considered a resident of the country with which they hold the closest personal and economic ties.
  2. If the above criterion does not determine residence, the individual is considered resident in the country where he or she usually lives.
  3. If the individual lives habitually in neither or both, they are a resident of the country that gave them their nationality.
  4. If they have dual nationality of both countries, or of neither, the Authorities in question will resolve the case by mutual agreement.

Double Taxation Agreements signed by Spain

When is an individual considered to be resident in Spain, and when non-resident?

An individual is resident in Spanish territory when any one of the following circumstances apply:

  • They have stayed longer than 183 days in Spanish territory over the calendar year. In order to determine the permanence in Spanish territory, occasional absences are included, except if the taxpayer accredits their residency in another country. In the case of countries or territories labelled as tax havens, the Tax Administration can demand proof of stay in that tax haven over a period of 183 days within the calendar year.
  • They situate the main base or centre of their activities or economic activities, directly or indirectly, in Spain.
  • They have dependent not legally separated spouse and/or underage children who are usually resident in Spain. This latter situation accepts evidence to the contrary.

Individuals of Spanish nationality who accredit their new fiscal residence in a country or territory labelled as a tax haven will not lose their status as taxpayers for Individual Income Tax. This rule is of application during the tax period in which the change of residence occurs and for the next four tax periods.

Otherwise, where none of the previous situations applies, an individual is considered as non-resident in Spain.


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10 respuestas a Fiscal Residence

  1. Benmiloud dijo:

    Ola Javier , buenas dias
    Î am jubilado from United Nations. Î worked as international civil servant in Paris and now l am living Between France ans Spain.
    Î Heard that in some province Of Spain like Cataluna or Andalucia we are exempt of paying Income tax or little non resident tax if we stay more than 183 days
    l like to seateldown in the Communidad Valenciana
    For thé moment l am paying the income-tax in France which is very hight
    Please l would like to Have more informations and the adéquat and simple way to reach thé best and cheapest way without any problem with both countries Spain and France
    I would like to now if you can help and how long it will take if it is possible pour
    Tank you very much for our help .
    Cordially , M.Benmiloud

    • Income tax in Spain is quite similar in all Spanish regions, but not inheritance tax or wealth tax.
      ONU pension is not exempt of taxes in Spain.
      If you want send me a email and we calculate tax that you will pay in Spain so you can compare with tax you are paying in France.

  2. elaine dijo:

    Hello Javier
    my question is,
    Is it posible for UK CGT losses carried forward to be applied in Spain.

    • NO.
      CGT credit for losses is a credit given to you by HMRC.
      But Spain tax authority, AEAT, is not liable for this credit.
      When you arrive as resident to Spain, your assets for tax purposes are “valued” at this arrival date. CG or CL before this date belong to UK, and after that day to Spain.
      But you can compensate this losses against any exit tax when leaving UK.
      So, there is no possilibity of cross-border carry forward.

  3. Hans dijo:

    Hi Javier,

    I have a question which I can’t seem to find the answer to, the spanish tax system can be a bit frustrating to figure out at times!

    I’m currently living in Barcelona, as of a sabbatic year I’ve devoted to work abroad. I’ve been here since 02/11/14 and I plan on staying here until summer (june or july maybe). I’m a citizen of Denmark but I’ve moved my residency to my apartment in Spain, to avoid being taxable in my home country. I have a job at a international company who provide my salary and therefore everything with my salary should be going as it should.

    Right now I only pay a small amount of general taxes on my salary (between 5 and 8% + Social security) because I’ve never lived and worked in Spain. But I have also been told that this was the normal thing to do. But if I have to return to my home country after 8 months in summer 2015, would I then have to pay a lot of money back or how does it really work? My base salary a year is 18000 euro and I will cancel my catalan residency when I leave to go home in june/july on a permanent basis.

    I hope you can help me, thanks!

    • As long as you can prove that you was not more than 183 days in Spain in 2015, you will not be tax resident in 2015 in Spain.
      Helps if you pay your Non Resident Tax for your flat in Barcelona, form 210.

      If you want, gime a call, my mobile is on the web.

  4. Deborah dijo:

    Thank you for your reply Javier. Services are invoiced to a VAT registered company in the UK. The autonomo alta has been submitted and also alta as an intracommunity operator. The box was ticked as resident but the question has now arisen as to whether his tax resident status for 2012 must be non-resident because he only arrived in September and therefore will not be in Spain for more than 183 days of the tax year. Since he has his business interests in Spain and is not tax resident elsewhere, can he declare as tax resident for 2012? And if the answer is that he must be taxed as a non-resident for 2012, is this at a rate of 24,75% or 30%?

    • Javier dijo:

      As the alta as Autonomo is already presented, you are now Spanish fiscal resident. So you should present Renta as resident
      Regarding VAT, you have to present the VAT (form 303) during the 20 days following the end of each term. Plus the annual form 390. For this forms you can deduct the VAT paid.
      Regarding Renta (individual income tax) you will fill page 5 for actividades económicas, where you will put your income and deduct your expenses (telephone, office o house rental…). Obtaining so your profit.
      This profit will be taxed:
      The first 5151 euro exempt
      The next 2652 also exempt
      the next 17707, will be taxed at 24,75%
      And you can obtain a tax deduction of 15% of your rental
      (for seeing tax rates: )

  5. Deborah dijo:

    In the case of a UK national moving permanently to Spain in September and registering as autonomo (working entirely at home by computer), will he be taxed as resident or non-resident in the period September to December. (He is technically non-resident in both Spain and the UK in this period using the 183 day rule.) If he is taxed as non-resident will this be at 24,75%, or will he be classed as working from a permanent establishment and be taxed at 30%. Your advice would be much appreciated.

    • Javier dijo:

      The main question is: how you bill for your services?: you receive a salary? or, you produce your own invoices to be paid?
      If you receive a salary and the paying company is not spanish most likely you will no be liable for taxation in Spain.
      If you receive a salary and the paying company is spanish, it wil withhold 24,75% if you are non resident, or the local % if you are resident (%, depends on the total expected annual income.

      If you produce your invoices, and you want to be spanish resident, you shoul present a declaration of starting activity (model 037), you will add VAT, and the company will withhold 21% (9% during the first 24 months). At the end of year you will present your Individual Income Tax (Renta), where you will deduct from your income your expenses, and from the amount to pay you will deduct your withholded tax.

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