Tax residence in Spain

Criteria to be considered a tax resident in Spain

As outlined in Article 9 of the Personal Income Tax Law and recent judicial interpretations, a person is deemed a tax resident in Spain if they meet any of the following criteria:

Individuals whose habitual residence is within the Spanish territory

Physical presence: If you stay in Spanish territory for more than 183 days during a calendar year. These days do not have to be consecutive, and sporadic absences are included, i.e., holidays and business trips, which are also considered when calculating the number of days spent in Spain.

Centre of economic interests: If most of your income, investments or economic activities are in Spain.

Familial situation: If your non-legally separated spouse and/or minor children habitually reside in Spain.

The main purpose of the tax resident concept in the context of Double Taxation Conventions (DTC) is to address conflicts of double taxation between two countries’ jurisdictions. This issue arises when both countries classify the same taxpayer as a tax resident under their respective laws. To solve this, DTCs implement a process based on the ‘tie-breaker rules.’ These rules help the involved countries determine tax residency in favour of one jurisdiction, avoiding double taxation.

In Spain’s double taxation treaties, a person’s residency is determined by each state’s domestic laws. Since every state can set distinct criteria for determining residency, two states may coincide in considering a person to be a resident.

The dispute must be settled according to the ‘tie-breaker’ rules of Article 4.2 of the Double Taxation Conventions. These rules, described in order of priority, include:

Individuals with Spanish nationality whose usual residence is abroad

If you are a Spanish national residing outside of Spain, you may still be classified as a tax resident in Spain based on particular circumstances outlined in Article 9.2 of the LIRPF.

Circumstances regarding habitual residence for foreign nationals

• Members of Diplomatic Missions: This includes the Head of Mission and diplomatic, administrative, technical, or service staff.
• Members of Consular Offices: Includes the Head of the Office and related staff, excluding vice consuls, honorary consular agents, and their personnel.
• Members of Delegations to International Organisations: Individuals in official positions within Delegations or as Observers
• Civil servants working abroad: 
  • Who are in non-diplomatic or non-consular positions overseas (as outlined in Article 5.b of the TRLIRNR).
  • Who are in positions that represent the Spanish Government in diplomatic missions, consulates, or international organisations, Article 9.2 LIRPF.
  • Who resides in a country classified as a tax haven, unless they prove their effective residence and tax liability in that territory.

Tax implications according to your fiscal residency status

Your tax residency status determines your tax obligations in Spain. These implications include:

• Tax residents: subject to be taxed on their global income, encompassing earnings both inside and outside Spain.
• Non-tax residents: Under the Non-Resident Income Tax (IRNR in Spain), taxed only on income generated in Spanish territory.

• Personal Income Tax (IRPF) – Model 100: In Spain, your global income, including rental income, dividends, and capital gains, will be subject to taxation. To prevent double taxation, it’s essential you ensure there is a double-taxation agreement in place between Spain and your country of origin.
• Declaration of Assets – Form 720 in Spain: All individuals and legal entities are required to fill out a 720 form to declare overseas assets outside of Spain that exceed €50,000. This measure is essential to avoid accusations of tax evasion.
• Wealth Tax: This tax applies to worldwide net assets surpassing €3,700,000.
• Inheritance and Gift Tax: This varies based on the relationship and the autonomous community in which the property is situated.

How do I get the tax residence certificate in Spain?

According to the Spanish Tax Agency website, you must follow these steps to obtain your certificate of tax residence in Spain:

1. Access the e-site: Go to the Tax Agency website and look for the ‘Tax Certificates’ section.
2. Identification: To start the online procedure, you will need a digital certificate, electronic ID, or Cl@ve PIN.
3. Fill in the form: In the application, provide the necessary details, such as personal information and the purpose of your certificate.
4. Documentation: Attach the documents needed to verify your tax residence in Spain, like the census certificate or proof of income and expenses.
5. Obtain your certificate: Once created, you can download the certificate from the platform, or it will be sent to your Single Enabled Electronic Address (DEHú) or your home address.

These certificates are valid for one year.

However, according to the TEAC ruling of 18-12-23, the tax residence certificate is key in proving non-residence for tax purposes in Spain. Submitting it to the Spanish Tax Agency does not automatically acknowledge non-residence in Spain; instead, it requires the Spanish administration to justify the contrary.

Rosana Tejada works as a tax consultant in Spain, examining cases for European clients seeking Spanish Residency, as well as non-EU citizens applying for the Non-Profit Visa or Digital Nomad Visa. Frequently, these clients inquire whether obtaining a visa or residence permit (the so-called administrative residence) will automatically make them tax residents in Spain. According to DGT V0346-15, the answer is no; tax residency is determined by fulfilling the criteria outlined in Article 9.1 of the IRPF rather than by the approval or rejection of a visa or administrative residence permit.