When are you considered a resident in Spain for taxes

If you are thinking of spending a season in Spain or starting some type of business, you should know that it is important to know when you are considered a resident in Spain for taxes. This aspect is essential because it differentiates the taxation that is applied in case of being or not a resident in Spain.

Residence and tax residence in Spain, is it the same?

Being a resident in Spain means having a valid residence permit. To reside in our country in the long term it is necessary to have said permit. In addition, it is also necessary to work.

On the other hand, being a tax resident in Spain means that, even if you are a foreigner, you have the obligation to pay taxes in the same or similar way as Spaniards do.

Applicable regulations

To determine whether or not a person is considered a tax resident in Spain, you must refer to the regulations.

You must refer to article 6 of the Non-Resident Income Tax (IRNR), which establishes the general and special cases for considering residence in Spain.

General assumptions of residence in Spain

In order for a natural person to be considered a habitual resident in Spain for taxes, in accordance with current regulations, one of the following cases must occur:

When there is a period of stay in Spain of more than 183 days during a calendar year. To calculate this time, the following must be taken into account:
- Sporadic absences are not computed within this period, except if tax residence in another country is accredited.
- In the case of countries that are considered tax havens, proof of stay in the country for at least 183 days can be required.
- Temporary stays in Spain that derive from obligations for cultural or humanitarian collaborations with Public Administrations are not taken into account, as long as it is free of charge.
Base of an economic activity or economic interest is established in Spain, both directly or indirectly.
It is also presumed that a person is a resident of Spain when their spouse or dependent minor children reside in our country. All of this unless proven otherwise.
Individuals who have Spanish nationality and establish their new residence in a tax haven will continue to have their tax residence in Spain and will have the obligation to contribute to personal income tax during the period in which the residence is changed and the four following tax periods.

A natural person who is considered a resident or non-resident in Spain will be so throughout the calendar year, even if they change their residence during the tax period.

Special cases of residence in Spain

In addition to the general cases that we have seen in the previous point, there are also special cases to consider a person as a resident

People residing abroad, their spouses and minor children are considered personal income taxpayers in the following cases:

When they are members of Diplomatic Missions. This point includes the head and members of the mission, administrative, technical and service.
As long as they are members of the Spanish Consular Offices. In this case, the head, officials and service personnel assigned to them are included. Vice-consuls and honorary consular agents and the personnel that depend on them are excepted from this point.
All persons who hold the title or position of State employee and members of delegations and permanent representations that are accredited before International organizations or that are part of delegations or observer missions abroad.
Active officials who hold an official position or employment abroad that is not diplomatic or consular in nature.

These mentioned cases will not apply in the following cases:

When people are not active public officials or holders of a job or official position when they have their habitual residence abroad prior to the acquisition of the aforementioned circumstances.
In the case of spouses and minor children, when they have their habitual residence abroad before the family member has any of the conditions listed above.

Differences between being or not tax resident in Spain

A person who is considered a resident of Spain must pay Spanish taxes in the same way as nationals.

For example, a person residing in Spain will have the obligation to pay Personal Income Tax (IRPF) for all income obtained anywhere in the world.

Non-residents in Spain must pay taxes in Spain only on income obtained in the country. In addition, other taxes are applied to them, such as the Income Tax for Non-Residents (IRNR) and others are different, such as the Inheritance and Donation Tax.

Returning to the previous example, a non-resident person would only pay personal income tax for the portion of income obtained in Spain. Knowing when you are considered a resident in Spain for taxes is essential as it can make a significant difference in taxation. According to the applicable regulations, there are some general cases, among which is spending more than 183 days in the country or having the basis of economic activity, and also some special cases in which a person is considered a tax resident in Spain.

Further information

This article is part of our service Taxes in Spain for foreigners. Visit this section where you will find all the useful information on this topic, including a complete guide Taxes in Spain for non-residents and foreigners.

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