Tax residence is doubly important in terms of taxes. In fact, people who are tax residents in Spain are taxable on their entire income, even from a foreign source, while non-residents are only taxed on their Spanish-source income.

In addition, only residents are subject to the IRPF (personal income tax), while non-residents are taxed at IRNR (non-resident income tax).

To find out if you are a Spanish tax resident from the year of your arrival, you have to look at whether you meet the conditions outlined in Spanish law:

• you live more than 183 days in the civil year in Spain
• or the main center of your professional or economic interests is in Spain
• or your spouse and children are residents in Spain

You are considered a Spanish tax resident if only one of these conditions are fulfilled.

Tax resident in two different states

However, a person may sometimes be considered as a tax resident in two different states under the domestic legislation of each of these states.

In such a situation, it is appropriate to apply the tax treaty that exists between Spain and the other country. In Spain, 93 conventions are in place and 9 are in the process of ratification.

These agreements provide for criteria to determine the residency in the event of a conflict of tax residency according to the national legislation of each of the States.
The study of the relevant international convention will determine the taxpayer’s country of tax residence.