In general, tax residence in Spain is determined according to certain criteria which must be met in each tax period, which coincides with the calendar year, as follows:

  • The person’s stay in Spanish territory for more than 183 days during the calendar year, regardless of whether these are followed by or interrupted by sporadic absences, unless tax residence in another country is accredited.
  • Who has in Spain the main nucleus or base of his activities or economic interests, directly or indirectly.
  • When, although the taxpayer does not reside directly in Spain, his or her spouse, who is not legally separated, and the minor children who depend on him or her do so.

To the extent that any of these circumstances exist, the individual in question will be considered a “taxpayer of personal income tax and will be taxed in Spain on his worldwide income”.

Doubts have arisen in the interpretation of the application of this regulation (article 9 of the Personal Income Tax Law) during the State of Alarm decreed by the Spanish Government on 14 March 2020 and which lasted until 21 June 2020.

In view of these circumstances, and after a binding consultation with the Spanish Tax Agency to clarify whether a married couple, who were tax residents in Lebanon, arrived in Spain in January 2020 for a three-month trip but had not been able to return home due to the state of alarm, should be considered as Spanish residents. They receive no income in Spain and spend less than 6 months a year in Spain on a regular basis.

The response of the Tax Agency was categorical, considering that the days spent in Spain by this couple due to the state of alarm would count for tax residence purposes, so that if they stayed more than 183 days in Spanish territory in the year 2020, they would be considered taxpayers of personal income tax.

In Spain, binding consultations with the Treasury are a procedure that allows taxpayers to obtain a binding resolution on how a rule should be interpreted in its application to a particular case of a taxpayer. In this sense, “the consultant will be considered an income tax payer and will be taxed in Spain on its worldwide income”.

Under these premises, the Tax Agency, in publishing this consultation, makes it clear that any period spent in national territory will be counted towards the requirement to pay taxes in Spain, whether voluntary or involuntary, and seems to be following a different path to that of the recommendations of the OECD (Organisation for Economic Co-operation and Development), which have already been adopted by several countries such as the United States, the United Kingdom, Ireland and Australia, and it should be remembered that they are not binding on the countries that make up the Agency.

In Imont Legal Services our experts in tax matters are in continuous training, updated and in front of the new exceptional tax circumstances.

Our objective is to attend the doubts that the current situation raises to assure the adequate fulfillment of the tax obligations of our clients, and for that, we offer personalized advice in each specific case.