Everything you need to know about the Tax Residence and the Income Tax Return

The tax residence is a matter to consider at the time to file the income tax return.

tax residence tax return spain

First, if the taxpayer remains in Spain, the most effective method to prove main residence before the Treasury Department, is for the same to match the information on the census registry and the tax residence. You can find more information about this in our article “Is the Padron sufficient to prove the Residence for tax deduction purpouses?”

If the taxpayer’s residence is overseas or he/she is a foreigner in Spain, we leave our comments below.

An individual is deemed as a resident in Spain when the country is the base of its economic activities and he/she is a taxpayer, and if the individual is a Spanish citizen who travels abroad, but receives economic benefits from income obtained in Spain.

This is also the case of anyone who remains in Spanish territory for more than 183 days throughout the year, that is, most of the year in the country.

Another case is when a spouse non-legally separated and the children who are minors and depend on the taxpayer, have their main residence in Spain.

Therefore, an individual who lives overseas, but gets most of its income in Spain, it is considered as a tax resident as much as someone who has never left the country.

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If the Spanish residents move to another country, they may face the risk of being considered as tax residents in two countries, being liable to pay taxes on their worldwide income.

It is likely for people who move to Spain to need special advice to answer their doubts in terms of a “double tax residence.” You can find more details about this in the post “rule to declare a fiscal resident in Spain”

In any of these circumstances, the differences may be solved thanks to the agreements signed among countries with a normative that establishes “which of the two countries may treat you as a resident.” Spain has subscribed more than 90 of these agreements with numerous countries.

Otherwise, the ideal scenario is to contact the pertinent fiscal authorities, of one of the countries or both, to clarify the steps to follow.

What you need to know:

EU Normative establishes that “each country still has certain freedom to decide what percentage of your income represents most of it.”

The country where “you obtain the totality or most of your income shall be required to apply the same deductions and tax breaks it offers to its residents, regardless if they consider you a tax resident or not.”

There is also the figure of cross-border workers who receive a fictitious tax resident treatment by some countries. In this case, if the deductions and breaks “to which country resident are entitled to” are applied to you in the country where you work, the same from your country of origin cannot be applied to you as well.

Consider that “tax authorities of both countries shall communicate to make sure deductions and breaks are not duplicated.”

If you live in La Axarquía, in municipalities such as Benajarafe, Caleta de Vélez, Torre del Mar or Torrox, you can contact us for accounting or solicitor services related with the pay of your taxes.

The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.

Author: Rosana Tejada
Biographical Info: Rosana Tejada Crespo is a tax advisor holding a Master’s Degree in International Taxation. She specialises in companies and freelancers, tax regulations concerning foreign employees (Beckham Law), non-resident tax, inheritance tax and Spanish income tax. She is one of the founders of Tejada Solicitors, which comprises a group of English speaking solicitors, economists and architects.

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Everything you need to know about the Tax Residence and the Income Tax Return
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First, if the taxpayer remains in Spain, the most effective method to prove main residence before the Treasury Department, is for the same to match the information on the census registry and the tax residence. You can find more information about this in our article “Is the Padron sufficient to prove the Residence for tax deduction purpouses?”
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Tejada Solicitors
Tejada Solicitors
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