When do I become a tax resident in Spain? How do I calculate the 183-day rule?

The concept of tax residency in Spain has direct repercussions on your tax obligations in the country, being one of the most relevant legal aspects for your life in Spain. Your tax residence status determines which taxes you must pay, whether on Spanish income only or on worldwide income, and in what amount.

In this article, we explain when you become a tax resident in Spain, how the Spanish 183-day rule works, and how the Tax Administration calculates the days of presence, so you can clearly assess your personal situation.

1. What is tax residency in Spain?

Firstly, we must clarify the concept of tax residency, which is related to permanence in Spain for the purposes of immigration or residence permits but they are legally independent concepts.

Spanish tax residency is the condition determined by the Tax Agency for those foreigners who reside in Spain for an extended period of the year and/or have economic interests in the country.

This generates the obligation to pay a series of taxes and pay taxes according to certain percentages.

Being considered a tax resident in Spain entails important tax implications.

In many cases, tax residents often benefit from different tax brackets and deductions compared to non-residents with the Beckham Law, which can represent an attractive alternative for many foreigners moving to the country.

2. When is a person considered a tax resident in Spain?

Under Law 35/2006 on Personal Income Tax and other Spanish tax legislation, an individual becomes a tax resident in Spain if any of the following circumstances apply:

2.1. Staying more than 183 days in Spain during a calendar year

A person becomes a tax resident if they spend more than 183 days in Spain, during a calendar year, even if the stay is not continuous.

To determine this period of permanence in Spanish territory, temporary absences are included in the count, except those where the tax residency in another country is proven. In practice, some administrative situations can be confusing, in particular the fact of being registered in Spain (“empadronamiento”), which does not necessarily imply the acquisition of tax residence. In the case of countries or territories labelled as tax havens, the Spanish Tax Administration can demand proof of stay in that tax haven over a period of 183 days in the calendar year.

2.2. Having the core of economic interests in Spain

A person is also considered a tax resident when the main core or base of its professional activities or economic interests is located in Spain, whether directly or indirectly.

The centre of interests of the taxpayers is defined where most of their investments are concentrated and where the taxpayer’s business activities are effectively managed and administered.

In this context, as per the Central Economic Administrative Court (hereinafter, CEAC), to determine that the main core or base of the taxpayer’s economic interests is in Spain, it is not mandatory to demonstrate that most global assets are located in Spain.

It is sufficient to show that Spain holds more assets or economic interests than any other single country (relative majority).

2.3. Habitual residence of spouse and children in Spain

It is presumed, unless the contrary proven otherwise, that a taxpayer’s habitual place of residence is Spain when the spouse (not legally separated) and dependent minor children permanently reside in Spanish territory.

2.4. How is the 183-day rule in Spain calculated?

A common question is how the Spanish Tax Agency calculates the 183 days. Do the days of arrival and departure from Spain count? Are sporadic absences really considered?

The CEAC addresses these questions by establishing a doctrine, notably through its binding resolutions of March 28th, 2023, and April 25th, 2023, which hold binding authority for the entire Tax Administration.

According to the Economic Court, the concept of permanence in Spain should be interpreted in an objective manner, accepting that the day of permanence is counted as any day in which there is physical presence in Spain, during any even for part of the day, counts as a day of stay. There is no minimum number of hours required, and an overnight stay is not necessary.

Furthermore, the Court specifies that if the taxpayer provides evidence of being abroad on the same day when certified presence in Spain is confirmed, the day is still counted as a day of stay in Spain. Instead, a 1-1 calculation is applied, considering both the day spent in Spain and the day spent in the other country, resulting in the same day being counted twice.

Likewise, the days on which the taxpayer starts or ends a journey from a Spanish airport, i.e. the days “in transit” through Spanish territory to go to the airport because the country of residence does not have an airport, are days of stay if they involve crossing the customs or immigration barrier.

2.4.1. Example of calculating the 183 days in Spain

David, an American national, lands at Madrid airport at 10 pm on 01/04/2023, on a flight from Miami and remains in Spain until August 31st of the same year, when he catches a flight from Barcelona at 3 am to Amsterdam.

Subsequently, David returns to Madrid from Amsterdam on 01/10/2023 at 11:30 pm and remains in Spain until 31/10/2023, when he takes a flight back to Miami.

Calculation of days:

• From April 1st to 30th: 30 days
• From May 1st to 31st: 31 days
• From June 1st to 30th: 30 days
• From July 1st to 31st: 31 days
• From August 1st to 31st: 31 days
• From October 1st to 31st: 31 days

Total days on Spanish territory: 184 days, meaning David meets the 183-day tax residency rule in Spain.

Considering the above points, it is strongly recommended for anyone planning a prolonged stay in Spain within a calendar year to maintain an accurate record of the days spent in the country.

3. Tax implications depending on tax residency

Nevertheless, determining tax residency can be complex. Therefore, it is recommended to seek a professional advice from a global tax advisor. Beyond entry and exit dates, occasional absences may also be counted, and other circumstances may arise that could influence the determination of tax residency.

3.1. Consequences of being a tax resident in Spain:

If you are considered a tax resident Spain, you will be subject to an unlimited tax liability. Consequently, you will have to pay tax on all the income you generate both in Spain and in any other country, which may increase your tax bill, depending on the case.

3.2. Consequences of being a non-tax resident in Spain:

On the other hand, if you are not considered a tax resident in Spain, you are subject only to limited tax liability, and Spanish taxes apply exclusively to income and assets located in Spain, excluding foreign income.

4. Get legal advice on tax residency in Spain

Spanish tax residency rules, especially the 183-day rule, can have significant financial consequences. If you have doubts about your situation or need clarification, professional tax advice is strongly recommended.

Please contact our experts to help you assess your residency status and understand your obligations under Spanish tax law.