Does the “empadronamiento” in Spain imply tax residence in Spain?

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If being “empadronado” (registered) implies consequences and fiscal obligations to the Tax Administration, just for the fact of having municipal registration is a recurring question that many citizens frequently ask.

First, it’s essential to bear in mind that the “empadronamiento” is an administrative concept, which is regulated by Law 7/1985 on the Bases of the Regime Local, and tax residence is a tax concept, which is governed by General Tax Law and by the Personal Income Tax Law.

Indeed, it is possible for an individual to be registered in a municipality within an autonomous community in Spain, such as for owning a holiday home, while their tax residence is in another community or even in another country.

We’ve noticed that many of our international clients often confuse “empadronamiento” with tax residency, mistakenly assuming that being registered as residents in Spain obligates them to meet tax obligations in the country.

Article 15 of the Bases of the Regime Local Law establishes the following:

“Anyone residing in Spain is required to register in the town or city where they usually reside. In cases where individuals live in multiple towns or cities, they should only register in the one where they spend the most extended period each year”

As per the criteria established by the Tax Administration, merely registering one’s place of residence does not, on its own, serve as conclusive accreditation of tax residence and habitual residence in a specific location in Spain.

According to Spanish tax regulations, an individual will become a tax resident in Spain if any of the following circumstances apply:

  • Stay in Spain for more than 183 days during the calendar year, irrespective of their formally registration. To determine this period of permanence, your sporadic absences are counted unless you prove your tax residence in another country.
  • That it shows the main core or the basis of its economic activities or interests in Spain, directly or indirectly. If the taxpayer earns more income or possesses more assets in Spain than in any other country, Spain will be deemed the centre of economic activity.
  • The “centre of vital interests” is in Spain: in cases where the spouse and minor children in common have their habitual residence in Spain.

Furthermore, the Autonomous Community where the taxpayer has his tax residence will be the territory, he has remained the greatest number of days of the tax period.

It’s important to note that mere “empadronarse” in Spain does not automatically establish tax residence in Spain. Tax residency of a natural person is based on facts and circumstances and must be proven. The tax authorities (Hacienda) equate fiscal domicile to habitual residence, implying the obligation to pay taxes in Spain on all income and assets generated by the taxpayer, not only within Spain but also worldwide.

If an individual has their tax residence in another country (where typically reside or derive most of their income), the taxpayer will only be obligated to pay taxes in Spain on the assets and rights they possess in Spain. In this scenario, they would be subject to a limited tax obligation in Spain.

In conclusion, holding a residence permit, such as obtaining a Golden Visa, and being registered as the owner of property acquired in Spain, does not automatically imply that an individual is a tax resident in Spain, with the associated tax obligations we’ve discussed. Instead, the tax residency status is based on a real obligation.

Should you have any questions or would like to receive more information, please contact us.

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