Tax residence in Spain the year you move: the whole year, your family and the special regime

Personal income tax does not split the year

Personal income tax is charged on the taxpayer's income regardless of where it was obtained (Personal Income Tax Act, article 2), the tax period is the calendar year (article 12.1) and residence is measured over that year (article 9.1). Anyone who turns out to be resident in the year they arrive is resident for the whole year, and that year's income tax return (Renta) includes what they earned anywhere in the world, including before they arrived. If the country of origin also considers them resident that year and the two countries have a double taxation treaty, the treaty determines to which of the two residence is attributed for the purposes of the treaty itself. That is why the date of arrival is not enough to answer the question: the whole year has to be looked at.

More than 183 days, and sporadic absences count

A person is resident if they spend more than 183 days of the calendar year in Spain, and sporadic absences are counted for that purpose, unless tax residence in another country is proven; if that other country is a territory classed as a tax haven, the Tax Agency may require proof of having stayed there for 183 days (article 9.1.a). Even without exceeding 183 days, a person is resident if the main centre or base of their activities or economic interests is in Spain, directly or indirectly (article 9.1.b). Someone who arrives on 1 May and stays until the end of the year adds up 245 days; subtracting trips as if they did not count is a frequent mistake, because sporadic absences count unless tax residence in another country is proven.

The family carries weight

If, under those same criteria, your spouse, not legally separated, and your minor children who depend on you are habitually resident in Spain, it is presumed, unless proven otherwise, that you are resident too (article 9.1). It is common for the family to settle here while the business stays in the country of origin; in that case the presumption works against the person who wants to remain non-resident, and what decides is the evidence with which it can be rebutted, not just the days.

What you earn abroad and the tax paid there

A resident declares their worldwide income in Spain. If that income includes income or capital gains obtained and taxed abroad, the lower of two amounts is deducted: the amount actually paid there for a tax of an identical or similar nature, or the result of applying the average effective tax rate to the part of the taxable base (base liquidable) taxed abroad (Personal Income Tax Act, article 80.1). A business that is still active in the country of origin, for example as a sole trader, forms part of that income, and the treaty between the two countries, if there is one, may decide who taxes what. If both countries are in the European Union, how Social Security fits in as well is explained in self-employed in two EU countries (in Spanish).

Digital nomads and the special regime for relocated workers

Anyone who acquires tax residence in Spain as a result of moving here may opt to pay Non-Resident Income Tax, under special rules and while remaining a personal income taxpayer, in the year of the change and the following five years (Personal Income Tax Act, article 93.1). The requirements are not to have been resident in Spain in the previous five years; that the move takes place in the first year of the regime or the year before and is due to one of the causes set out in the law (an employment contract, being a director of an entity, an entrepreneurial activity or being a highly qualified professional, each with its own conditions); and not to obtain income through a permanent establishment in Spain, except in the last two cases. Within the employment-contract cause, the law treats the condition as met when the work is performed remotely using exclusively computer, telematic and telecommunication means and, in particular, for employees holding a visa for international teleworking. Someone who invoices a foreign company as self-employed does not qualify by that route, which the law ties to the employment relationship; they may fit under another of the causes, such as the entrepreneurial activity of article 70 of Law 14/2013 or that of a highly qualified professional, each with its own conditions, and that is studied before arriving. Under the regime, employment income and income from the entrepreneurial activity obtained while it applies are deemed to be obtained in Spain (article 93.2.b); dividends, interest and gains from the transfer of assets have their own scale, and the rest is taxed at 24% up to 600,000 euros and at 47% on the excess (article 93.2.e, in connection with article 25.1.f of the consolidated text of the Non-Resident Income Tax Act). Anyone who opts is subject to Wealth Tax on a territorial basis (obligación real) (article 93.1). Each taxpayer notifies the option within a maximum of six months from the start date of the activity shown in the registration with Spanish Social Security or in the documentation that allows them to keep the Social Security legislation of their country of origin or, if registration is not compulsory, in the document that evidences the start of the activity (Personal Income Tax Regulation, article 116.1). The spouse, children under 25 or, if they have a disability, of any age, and, where there is no marriage, the other parent of those children may also opt if they move with the holder or later, before the end of the first tax period in which the regime applies to the holder, and the sum of their taxable bases is lower than the holder's, among other conditions (article 93.3); their deadline to opt is six months from their entry into Spain or, if later, the holder's deadline. It is not always worthwhile: the regime taxes only what the law deems obtained in Spain (which includes all employment income and income from the entrepreneurial activity obtained while it applies, article 93.2.b), at its own rates, and the comparison with general taxation depends on what income each person has, here and abroad.

If you already hold assets abroad in the first year

If you are resident in the year you arrive and hold accounts, securities, insurance or real estate abroad, form 720 may apply, and, if you hold virtual currencies located abroad and held in custody by a provider that keeps the private keys on behalf of third parties, form 721 may apply (General Tax Act, eighteenth additional provision, and Order HFP/886/2023). What is declared and from what amounts is explained in regularising your taxes in Spain as a foreigner.

How we handle it

Before the first return, and preferably before you arrive, we rebuild the year: dates of entry and exit, where the family lives, where the income comes from and what the treaty says. With that we decide whether you are resident that year, what is declared here, how the tax paid abroad is deducted and whether the special regime reaches you and suits you; if it does, the six-month period is the first thing we watch. Everything is done remotely: before the Tax Agency we act under your power of representation, so your digital certificate stays with you, and no return is filed until you know its amount and the reasons for it.