Fiscal Residence in Spain - Windram Miller

Fiscal residence - residence for tax purposes - should not be confused with actually living in Spain (and the Residence Permit necessary for the latter). An individual can become fiscally resident in Spain without setting foot in the country, and a company can become resident if, for example, its directors are resident there. Certain types of liability may be exempted under an applicable Double Tax Treaty.

A resident of Spain (individual or company) is liable to Spanish tax on the total of his worldwide income and realised gains. A resident individual is liable to Spanish Gifts and Inheritance Tax on receipt of any gift or inheritance.

Non-residents of Spain are liable to Spanish tax on any income or gains, and receipts of gifts or inheritances arising or sited in Spain.

A brief summary of the Spanish law on fiscal residence is given below - this necessarily limited information is NOT a substitute for full professional advice.

Individuals

An individual may be fiscally resident in Spain if:

1. He remains in Spain 183 days or more (including sporadic absences) in the calendar year, or
2. The principal nucleus or base of his (directly or indirectly held) activities or economic interests is in Spain

Note: an individual is presumed resident in Spain, save proof to the contrary, if his spouse and minor dependent children are so resident.

Companies (and other bodies and entities)

A company may be fiscally resident in Spain if:

1. It was incorporated under the laws of Spain, or
2. Its registered office is in Spain, or
3. Its place of effective management is in Spain

Windram Miller & Company can provide full advice on issues of fiscal residence in Spain, the effects and consequences thereof, measures to be adopted to avoid such residence, possible cures for liabilities which may have arisen from inadvertent residence and in general anything related to the topic.