There is so much confusion about residency in Spain. People often don’t understand if they are a Resident, Tax Resident, or Non-Tax Resident. This is especially true for those citizens within the EU who can travel and reside in the EU countries freely and sometimes for the Non-EU citizens too.
Am I a Resident, Tax Resident, Non-Resident, or Non-Tax Resident?
This is the million-dollar question, as they say.
It is really difficult to explain all these concepts without being technical. However, I will try to explain it to you in a simple way so that you have a simple mental scheme in your head.
The initial category of every foreigner who comes to Spain would be that of a non-resident. Typically a foreigner initially comes with a non-permanent intention. They may come for short periods or on holiday and then return to their home country. With this, you may have an NIE (national identity number), but that is not residency. Many foreigners need an NIE to open accounts, for buying a property in Spain, or other actions within Spain.
You may request an NIE and depending on what you manage, a non-resident certificate (which can also be requested together with the NIE). These procedures are carried out at the corresponding National Police Station. To find your nearest police station, click here.
Here is more information for the Police Office in Motril. It will inform you about various procedures and requests.
Resident in Spain
If you decide that you want to live permanently or long-term in Spain, then you would need to request to become a resident.
In this case, you need to fill out the forms and make the request to become a resident at the police station or foreigner’s office. This process and the requirements differ if you are an EU citizen or a Non-EU citizen.
- For Non-EU citizens, this is a lengthy process that is usually initiated in your home country or where you currently reside outside of Spain. Wagoners Abroad has a detailed ebook to guide you through the process to become a resident in Spain and timing. It was written with Americans in mind, but now it will be a similar process for UK citizens.
- For EU citizens, your request can take place while you are in Spain. Wagoners Abroad has an ebook about getting settled in Spain, with a chapter focused on the process for an EU citizen to become a resident in Spain.
These procedures are carried out at the corresponding National Police Station. To find your nearest police station, click here.
Here is more information for the Police Office in Motril. It will help inform you about various procedures and requests.
Are you a Tax Resident?
As you can see, at no time have I talked about the issue of taxes or taxation. It was just about residency.
Well, now is the time to discuss taxes. These resident and non-resident procedures mentioned above are procedures with the Police Station and are not related to tax Hacienda España (Agencia Estatal de Administración Tributaria or AEAT). To put it simply, they are two different roads that don’t cross at the moment.
This means that the fact of having carried out all these procedures at the police station is not enough. You have to reach the next level, and make yourself visible to the Hacienda in Spain.
What does our taxation say about what determines being (and here I coin the key term) a Fiscal Resident?
For taxes, it all comes down to the number of days you spend in Spain in a given calendar year! The line is drawn at 183 days (consecutive or non-consecutive) in a given calendar year.
There is a significant difference between being a tax resident and a non-tax resident, as you can imagine.
If you live in Spain for more than half the year (183 days or more), for all purposes you would be considered a tax resident. To do this, we will have to count those days as of December 31 of that year.
For example, we are in January 2020. What tax category do I have? As of December 31, 2019, did I spend more than half the year in Spain or not? If the answer is yes, welcome to the wonderful world of tax residents.
Being a tax resident means paying taxes in Spain as if you were a Spaniard. You would have to make the income statement and you would have to declare your worldwide income (all the income that you obtain anywhere in the world). You may request a certificate of fiscal residency from the hacienda.
For any questions about a tax resident, please contact a local assessoria or gestor.
If you did not spend 183 days or more in Spain during the calendar year (January 1 to December 31), you are in the world of non-tax residents. You may own a home or visit a few times a year, but you aren’t in Spain over 183 days in a calendar year. Then you would not be liable for taxes in Spain.
The Big Question
How do the Spanish authorities know if I have lived in Spain for more than half of the year or not?
And the answer is simple: They don’t know.
This is especially true if you are a citizen in a country within the Schengen Area, (border-free movement).
Only if they did an inspection or verification could they check. For example; they could review your passport if you are a Non-EU citizen, but this wouldn’t be possible for an EU Citizen.
Many clients ask me: so you are telling me that it is an act of faith?
Are you telling me that if I move freely in Europe and I don’t have to stamp a passport, there is no way for the Treasury in Spain to know how long I am in Spain?
Well, the answer is Yes. That is what I am saying.
This situation causes common situations in which foreigners are residents (at the police station), but are not tax residents here in Spain, and are taxed in their countries of origin. I know that I just short-circuited your head, but this is what I’m telling you.
I repeat: the key is to determine if you live here more or less than half the year, and the key here is proof of this.
About the Author: Fran has been a lawyer in Spain for more than 20 years and is based in the Costa Tropical. He is fluent in English and Spanish and can facilitate you buying a property in Spain. While he is located on the Costa Tropical, he can assist with any properties in Andalucia and eastern Spain. You may read more about his services and what offers he has for free consulting, see lawyer in Spain.
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