Spanish admin residency = Spanish tax residency

Raymundo LarraĆ­n Nesbitt, March, 1. 2022

Marbella-based Larraín Nesbitt Abogados (LNA) has over 19 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists has a long track record successfully assisting expats all over Spain.

You can review here our client’s testimonials.

Article copyrighted © 2022. Plagiarism will be criminally prosecuted.

 

By Raymundo Larraín Nesbitt
Lawyer - abogado
1st of March 2022

Increasingly, more and more people are realizing that applying for Spanish residency has in fact tax consequences. I keep seeing this mistake being made over and over again.

A common misunderstanding on applying for Spanish residency is the matter of tax residency.

I have witnessed how several companies, and so-called ‘advisors’, purposely missell residency permits in Spain without properly disclosing to applicants the tax implications of their decision.

I’ve written again another short article on this matter as a gentle reminder.

The golden rule: Spanish residency permit = Spanish tax residency

Although – technically – it is true that admin residency and tax residency are two separate legal concepts, the fact is they eventually go hand in hand in most cases.

As a general rule, the following golden rule applies:

Spanish residency permit = Spanish tax residency

Without going into detail on the whys and why not's, the reason is that as a staple requirement all visas in Spain require on renewals you categorically prove you have lived in Spain long term; defined as spending over 183 days within a calendar year in Spanish territory.

The tax implication of this is that it automatically triggers tax residency in Spain.

Example: Mr. Smith applies and attains a Non-Lucrative Visa in May 2021 to avoid the pesky 90/180-day rule. In the following year (2022), unbeknownst to him, he must file personal income tax in Spain (IRPF) on the previous year because he has now become a Spanish tax resident (depending on the case, he may also need to file a 720).

If Mr. Smith challenges the tax residency status, on grounds that he did not spend over 183 days in Spain during 2021, he will be stripped of his residency permit.

In other words, they go hand in hand. You cannot have one without the other or your visa renewal will be turned down, period.

Is there any exception to this general rule?

Alas, yes.

It’s a special type of residency permit called Golden Visa (Investor Visa).

A GV allows its permit holder to bypass the 90/180-day rule. It also allows its holders' unfettered access to Spain. They may enter and leave as they please (even circumventing Covid restrictions).

Attaining a Golden visa, unlike every other visa in Spain, does not automatically make you tax resident in Spain and the reason being is because renewals are not tied to proving you live in Spain long term (which triggers tax residency), but rather that you have maintained the investment over time in Spain.

This nuance is extremely important and goes on to explain why Golden Visas are so special and why they are so sought after by affluent applicants as they do not preclude your tax residency on application.

As a recap, a Golden Visa allows you:

  • To legally bypass the 90/180-day rule
  • Unfettered access to Spain
  • Do not automatically make you tax resident in Spain (unlike every other visa in Spain)

 

LNA has a 100% track record attaining Spanish residency

 

Larraín Nesbitt Lawyers, small on fees, big on service.

At Larrain Nesbitt Abogados, we have assisted hundreds of EU and non-EU nationals to successfully attain a Spanish residency permit.

Interested? Come and speak to Larraín Nesbitt Abogados’ friendly staff who will be pleased to guide you through the different residency options, choosing the one that appeals to you most. Your family’s success is only one call away: (+34) 952 19 22 88.

Residency services available from LNA:

 

Related visa articles

 

Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution. VOV.

2.022 © Raymundo Larraín Nesbitt. All Rights Reserved.