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You will become resident for tax purposes in Spain if:

You spend more than 183 days in Spain during one calendar year. You become liable whether or not you take out a formal residence permit (Residencia). These days do not have to be consecutive. You do not become resident for tax purposes until the morning of the 184th day. Temporary absences from Spain are ignored for the purpose of the 183-day rule unless it can be proved that the individual is habitually resident in another country for more than 183 days in a calendar year, or
You arrive in Spain with an intention to reside there indefinitely. You will then be tax-resident from the day after you arrive. Obtaining a residence permit is evidence of an intention to stay, and will count against any claim that you are not liable for Spanish tax, or

If your “centre of vital interests” is Spain. This is a relatively new rule and is hardly ever applied, or

Unless proven otherwise, you are presumed to be a Spanish resident if your spouse lives in Spain and you are not legally separated even though you may spend less than 183 days in Spain.

A Spanish tax year is the same as a calendar year (1st January to 31st December), unlike the UK tax year which is from 6th April to the following 5th April.

If you are resident in Spain you will be liable for income, capitals gains and succession duty (inheritance tax) on your worldwide assets. This is in addition to other incidental tax liabilities such as IVA (VAT) and gift taxes. It is worth noting that gift tax and inheritance tax in Spain are payable by the receiver of the gift or inheritance.

If you live on a boat within 12 nautical miles of Spanish land, you are a Spanish tax resident. A day within 12 nautical miles is a day spent in Spain for tax purposes.

Fiscal Identity Numbers
If you reside in Spain, or if you own a property and are non-resident, you need a Numero de Identificacion de Extranjeros (NIE). The number identifies you to the Spanish taxman and is required when you pay your taxes or have any dealings with the Hacienda (Spanish tax office).

To obtain one, present yourself at the nearest police station with a foreigners’ department (comisaria), along with your passport and a photocopy of it. Fill in the form, keep the copy given to you, and wait for the number to be assigned. Check with the comisaria how long the process will take as it varies from a few days to a few weeks, and remember to take your passport and the copy of the form when you go to collect the NIE certificate from the comisaria.

Obtaining this NIE is this first thing you should do if you plan to reside in Spain and is also required if you buy a property (whether resident or non-resident). This system however is currently under review, and may even be abolished.


Who Should Apply for a Residencia (Residence Permit)?

The current Spanish law states any individual intending to remain in Spain longer than 183 days in any one period throughout the calendar year, who is not working and does not intend to work, should apply for a Residencia. Anyone legally working, either as an employee or in a self-employed capacity, no longer need apply for a Residencia (but it may be convenient to have one rather than carry/use your passport).

However, the Notary Office still requires proof that an individual is a resident, and therefore subject to different rules in respect of Capital Gains Tax payments. This will of course have a bearing if, for example, you are selling a property. There are two courses of action you can take if you think this may affect you a) you can apply to the Comiseria de Policia for a Certificado de Residencia; or b) you can apply to the Hacienda for a Certificado de Residencia Fiscal. Either of the above will be sufficient to confirm your Resident status to the Notary.

If you need and/or decide to apply for a Residencia, you will need the following:

Current passport + 1 photocopy
2 recent passport style photos with your name clearly written on the back
The relevant application form, duly completed + 3 photocopies

Your province Comiseria will inform you by letter when your Residencia is ready for collection, and when and where you must go to sign, fingerprint and collect the document. The processing time for Residencias varies significantly from province to province and in some places can take up to a year.

Please remember that once you have obtained your Residencia, you should exchange your British Driving Licence for a Spanish Licence. See Driving in Spain.

Renewing a Residencia
You will not be reminded when your Residencia needs renewing, so it is up to you to check. The documentation for renewal for EEC members is the following:

2 passport photos
Original Residencia + 1 copy
Original Passport + 1 copy
Relevant application form duly completed + 3 copies

Sources: BlevinsFranks, HR Consultants

See also

Scope of Spanish Tax
Spanish Income Tax
Spanish Wealth Tax
Spanish Capital Gains Tax
Spanish Inheritance and Gift Tax

 

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