Becoming a Spanish tax resident isn’t usually something you simply apply for or choose to do. Your tax residency is generally determined by your circumstances, including how much time you spend in Spain and where your main financial and personal interests are based.
The 183-Day Rule
One of the main factors is the amount of time you spend in Spain during a calendar year. Generally, if you spend more than 183 days in Spain, you will be considered a Spanish tax resident. Short or occasional absences may still count towards this total unless you can demonstrate tax residency in another country.
It is also worth considering how becoming resident in Spain could affect your wider estate and inheritance position. Our Spanish Succession Tax Guide explains some of the key issues to consider.
Your Financial and Family Ties
Time spent in Spain isn’t the only consideration. You may also be regarded as a tax resident if Spain is the main base of your economic activities or financial interests. There can also be a presumption of Spanish tax residency where your spouse, provided you are not legally separated, and your dependent minor children normally live in Spain. This means that simply staying below 183 days doesn’t necessarily guarantee that you will remain non-resident for Spanish tax purposes.
What Changes Once You Are Tax Resident?
Spanish tax residents are generally liable to Spanish tax on their worldwide income, rather than only income arising in Spain. Depending on your circumstances, this could include earnings, pensions, investments, and income from overseas property. There may also be reporting requirements relating to certain assets held outside Spain. For people with connections to both countries, the UK-Spain Double Taxation Convention contains rules for determining residence and dealing with potential double taxation.
If you are moving to Spain permanently or spending significant periods there, it is sensible to establish your likely tax residency position early. The rules can have a substantial effect on how and where your income is taxed, particularly if you retain financial interests in the UK or another country. If you continue to have UK connections, GOV.UK also provides guidance on how UK tax residence is determined.
Read more information on what happens if you overstay your visa, requirements for a Spanish work visa and investing in Spanish new builds. Or explore our latest guide on Spanish Succession Tax.
For help with Spanish law, contact Spanish Legal Matters on 020 8150 2010.
