Taxes in Spain Non Resident tax & Resident tax

Criteria NON RESIDENT AN RESIDENT TAX

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CRITERIA FOR TAX RESIDENCE IN SPAIN

First of all, we must know when a person is considered to be a tax resident in Spain.

Temporary criterion

Stay of more than 183 days in Spanish territory.

If the taxpayer stays in Spain for more than 183 days, he/she will be presumed to be tax resident in Spain in accordance with the temporary criterion.

Sporadic absences will be key in determining whether this time criterion is met or not, it is key that the intensity of such absence is sufficiently strong to demonstrate that the presence in Spain during a given period is accidental, and that it is not related to a habitual presence in Spain.

However, this is not the only criterion available to the tax department – AEAT to attract the taxpayer’s residence to Spain (card payments, the location of the IP or the consumption of the services of their homes …).

Centre of financial interests criterion

Another tax residence criterion used by the AEAT to attract tax residence in Spain is the existence in Spanish territory of the taxpayer’s centre of financial interests. What is decisive for the Spanish Administration in order to attract the centre of economic interests to Spain is that most of the sources of income are located in Spanish territory, regardless of the place from which the professional services are, de facto, rendered.

The centre of vital interests or family criterion

If the spouse is not legally separated and the economically dependent minor children reside in Spain.

In practice, despite being able to prove tax residence in another country by means of a certificate issued by the authorities of that state, there may be a risk of being considered tax resident in Spain, as the Spanish state may consider that other criteria are met, for example, in the case where it considers that the person has his or her main core of economic interests in Spain.

Non resident tax TAXPAYERS IN SPAIN

IRNR FORM 210

IRNR is, like IRPF, a direct tax on income obtained by a taxpayer (in this case, a non-resident in Spain), during the calendar year, but only on income considered to have been obtained in Spanish territory. Taxation under this tax excludes taxation under personal income tax, and vice versa.

1. In the case of income, when it becomes receivable, or on the date of collection if this is earlier. This would be the case if an owner of property in Spain rents it out, or if a ‘Golden Visa non-resident’ receives interest or dividends distributed by a company resident in Spain, or if he or she rents a property in Spain.
2. In the case of capital gains, when the alteration of assets occurs. For example, sale of property in Spain, or of shares in a Spanish company.
3. In the case of imputed income corresponding to urban property, on 31 December of each year. This would occur if, for example, the owner of one or more properties in Spain has not rented it out (form 210). The taxable base to be integrated will correspond to 1.1% of the cadastral value of the property in question (it will be 2% in case the cadastral value is not revised. Example. Valencia city).

Resident tax TAX OBLIGATIONS AS A RESIDENT IN SPAIN

We can help you with these formalities

IMPORTANT STEPS TO BE TAKEN

FORM 030

FORM 720

PERSONAL INCOME TAX RESIDENTS

Within our team of colleagues,
we are able to offer advice on resident´s tax

IRPF

IRPF is a direct tax levied on universal income (from both Spanish and foreign sources) obtained during the calendar year (from 1 January to 31 December) by individuals considered tax residents.

This tax must be managed by the individual, either himself or through a tax advisor.

FORM 718 Temporary Solidarity Tax on Large Fortunes.

• Complementary to the IP (Wealth Tax).
• Temporary nature (reviewable).
• The taxpayer of this tax are individuals resident in Spain with a net wealth of more than 3,000,000 euros at the date of accrual of the tax.
• There is a minimum exemption of 700,000 euros.
• Therefore, the tax will only start to affect from 3,700,000 euros of net assets.
• Deadline for filing: Between 1 and 31 July of the year following the date of accrual of the tax.

BECKHAM LAW Special tax regime applicable to workers posted to Spanish territory..

The IRPF Law provides (Article 93), a special tax regime for workers posted to Spanish territory (better known as the Beckham Law), which allows individuals who acquire their tax residence in Spain as a result of their posting to Spanish territory to opt to be taxed under the Non-Resident Income Tax (‘IRNR’) even if they are IRPF taxpayers, in the year in which the change of residence takes place and the following five years.

The main tax advantage for workers posted to Spanish territory is that the general IRPF taxable base is taxed at a fixed rate of 24% (up to 600,000 euros); instead of the corresponding marginal rate, which can be as high as the income received and the personal situation of the taxpayer.

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