Every year Spain issues thousands of residence permits to foreign citizens who come here to study, work, invest or simply have holidays at their second home.
Regardless of the type of authorisation, the same doubt usually arises: "having a residence permit in Spain implies becoming its tax resident?"
First and foremost, it must be clear that "a residence permit" and "tax residence" are two different concepts.
"Residence permit" means that a foreign citizen is authorised to live in Spain and, depending on the type of permit, to work as an employed or a self-employed worker.
In order to obtain such authorisation, it is necessary to follow a legally regulated administrative procedure before immigration authorities, whose requirements depend on a particular class of authorisation.
"Tax residence" means that an individual is bound to submit and pay taxes in Spain for all his income gained both in Spain and in the rest of the world.
An individual becomes a Spanish tax resident if he complies with at least one of the following legal requirements:
1. He/ she stays in Spain for more than 183 days a calendar year;
2. The main core or base of his/ her economic activity or economic interests is directly or indirectly located in Spain;
3. The main core of his/her family interests is in Spain. In other words, his/her spouse and dependent minor children usually live in Spain.
In conclusion, holding a residence permit in Spain does not automatically implies becoming its tax resident, but only in the case of compliance with the mentioned conditions.
When an individual has his main residence and works permanently in Spain, there is no doubt that he complies with these requirements. But what happens when a foreign citizen lives in different countries? Or when he invests in Spain, carrying out business activity in other counties at the same time?
In order to answer these questions, it is essential to analyse case by case, taking into account its particular circumstances.
At Martí & Associats we would be pleased to offer you our professional assistance in this matter, guaranteeing the individualised approach.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.