Tax residence in Spain: key rules and obligations explained

Tax residence in Spain is one of the key aspects you need to understand if you are considering moving, investing in property, or spending long periods in the country. In short, anyone who meets certain criteria of stay or economic interests in Spain is considered a tax resident, which implies being subject to tax obligations here.

In this article, you will find a clear explanation of how it works, what requirements are needed, and what the consequences of becoming a tax resident are, with practical examples and comparisons so that you can make informed decisions.

What does it mean to be a tax resident in Spain?

The quick definition is as follows: a person becomes a tax resident in Spain when they spend more than 183 days in the country during a calendar year or when their main economic or family interests are located here.

In detail, the Tax Agency establishes three main criteria:

1. Physical presence: if you spend more than 183 days in Spain in a calendar year, you are considered a tax resident.

2. Center of economic interests: if your main activity, business, or investments are in Spain, even if you spend fewer days here, you may also be considered a resident.

3. Family nucleus: if your spouse and minor children habitually reside in Spain, the law presumes that you are also a tax resident.

Meeting any of these three conditions triggers tax residency.

What is the difference between being a tax resident and a non-resident?

The main difference lies in the scope of your tax obligations.

This means that a tax resident in Spain must declare worldwide income, while a non-resident only pays tax on income linked to the country.

What are the tax obligations as a resident in Spain?

When you become a tax resident in Spain, you must:

• File the personal income tax return (IRPF).

• Declare your assets abroad using Form 720 if they exceed certain thresholds.

• Be subject to possible additional regional taxes, depending on the region where you live (for example, Andalusia).

In addition, Spain maintains double taxation treaties with many countries to avoid paying taxes twice on the same income, something that often concerns foreign buyers.

What should you know if you are a foreigner buying a property in Spain?

Many international buyers wonder if purchasing a property automatically makes them tax residents in Spain. The answer is no.

What matters is not the purchase itself, but how you use that property:

• If you use it as your main residence and spend more than 183 days here, you will indeed be considered a tax resident.

• If you keep it as a second home and spend less time, you will remain a non-resident, taxed only on income or capital gains generated in Spain.

This is especially important in areas like Marbella, where many foreigners spend long periods of time.

How is the 183-day rule controlled?

The Tax Agency can verify your stay in several ways:

• Passport stamps and entry/exit records.

• Consumption of electricity, water, and other utilities in your home.

• Presence of family members in Spanish schools.

Therefore, it is essential to keep clear control of the days you reside in Spain, especially if you divide your time between different countries.

What benefits and risks does tax residency in Spain entail?

Benefits:

• Access to double taxation treaties that prevent double taxation.

• Full integration into the Spanish health and social security system (in some cases).

• Stability and legal security by having your tax situation regularized.

Risks or drawbacks:

• Taxation on worldwide income, which may mean paying taxes on earnings obtained outside Spain.

• Reporting obligations such as Form 720.

• Progressive tax rates that, at high income levels, can be higher than in other countries.

What happens if I am a resident in two countries at the same time?

There are situations where, according to local regulations, you could be considered a tax resident in two countries. To avoid this conflict, double taxation treaties are applied.

In case of doubt, additional criteria are used, such as:

• In which country you have your permanent home.

• Where your family nucleus is located.

• In which country your vital interests are centered.

If there is still a conflict, the final decision may rest with the tax authorities of both States.

Comparative table: tax resident vs. non-resident

What options exist today to obtain legal residence in Spain?

If you wish to live in Spain, it is important to distinguish legal residence from tax residence. The first depends on permits and visas, while the second is determined by objective criteria of stay and economic ties.

Currently, there are several alternatives to obtain legal residence in the country:

• Non-lucrative residence visa: designed for those who wish to live in Spain without carrying out professional activity, demonstrating sufficient financial means.

• Visa for international remote workers (digital nomads): allows you to reside in Spain while working for foreign companies, with a special tax regime during the first years.

• Student residence: valid for those enrolled in academic or research programs.

• Family reunification residence: for direct relatives of legal residents in Spain.

• Long-term residence: after five years of continuous legal residence.

Relationship between legal and tax residence

• You can have legal residence and not be a tax resident if you spend less than 183 days and keep your center of interests abroad.

• You only become a tax resident if you meet the criteria of the Tax Agency.

Planning both aspects together is key to avoiding conflicts and optimizing your situation.

What about foreign retirees and pensioners?

For retirees, Spain is a preferred destination thanks to its climate and quality of life. However, they must keep in mind the following:

• If they spend more than 183 days, they become tax residents.

• Their pensions may be subject to taxation in Spain, depending on the treaty with their country of origin.

• Some countries allow pensions to continue being taxed in the country of origin, but it is essential to confirm this.

Here, specialized tax advice is essential to avoid surprises.

Practical tips for buyers and investors in Marbella

If you are considering moving to the Costa del Sol and establishing your tax residence in Spain, keep these points in mind:

1. Plan ahead: evaluate how many days you will spend here and how this will affect your international taxation.

2. Consult a tax advisor specialized in expatriates: regulations change and every situation is different.

3. Document your movements: keep flight tickets, contracts, and receipts that can prove your residence in another country if needed.

4. Review the applicable tax regime: in some regions there are additional tax benefits.

5. Consider the impact on your inheritance and assets: Spain also taxes inheritance and donations, which can vary depending on the autonomous community.

Conclusion: Is it advisable to become a tax resident in Spain?

Becoming a tax resident in Spain has significant implications. On the one hand, it offers legal security, access to services, and full integration into the country. On the other hand, it means being taxed on worldwide income and complying with additional obligations.

The key is to align your lifestyle, investment, and tax planning. Marbella and the Costa del Sol are extraordinary places to live, but it is advisable to organize this aspect in advance to enjoy your new life calmly and without surprises.

Ultimately, having a good understanding of the rules of tax residence in Spain is the first step to enjoying everything the country can offer you, from its quality of life to its investment opportunities.

Frequently asked questions about tax residence in Spain

1. How many days must I stay in Spain to be a tax resident?
More than 183 days in a calendar year.

2. Can I have legal residence but not tax residence?
Yes, if you do not meet the criteria of stay or economic interests.

3. Do I have to pay taxes on foreign income?
Yes, if you are a tax resident in Spain.

4. How do I prove where I am a resident?
With tax certificates, proof of stay, and double taxation treaties.

5. What if I am a foreign retiree in Spain?
Your pension may be taxed here, depending on the treaty with your country of origin.