Tax planning is a much ignored but vital area for expats living or moving to Spain, particularly for your investments, pensions and estate. Without a personalised, effective tax mitigation strategy it can be very easy to sleep walk into a unknown and significant tax liability.
If any of the following conditions apply the you are deemed to be resident in Spain for Tax purposes:
- You spend more than 183 days in Spain in one calendar year. The days do not have to be consecutive. Temporary absences from Spain are ignored for the purpose of the 183-day rule, however such absences may give rise to a tax reclaim under Article 7P (Days spent working outside Spain).
- Your “centre of economic interests” is in Spain, i.e. the base for your economic and/or professional activities is in Spain.
- Your “centre of vital interests” is in Spain – i.e. your spouse lives here (and you are not legally separated), and/or your dependent minor children do. In this case you are presumed Spanish resident, unless proven otherwise, irrespective of the 183 day rule.
There is no split year treatment in Spain. You are either resident or not resident for the whole tax year (1st January to 31st December)
Spanish non-tax residents are only liable to taxation on their Spanish income. in the event the Spanish tax authorities challenge your non-resident status, you would be required to submit a tax residency certificate from your country of residence.
In the event that you meet any of the above requirements you may become liable for Income tax, Capital Gains Tax, Wealth Tax, and Inheritance tax.
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