The main criteria for determining the tax residence of individuals is the time spent in Spanish territory. The number of days spent in Spanish territory includes both days of physical presence as well as sporadic absences. Given the nature of sporadic absences as an indeterminate legal concept, in order to determine the number of “days spent” in Spanish territory, the criteria established by both administrative doctrine and jurisprudence on this matter are of particular importance.
Tax residence is a fundamental concept in the tax field, since it determines the place where an individual is obliged to pay tax on his or her income. In the case of Spain, tax residence is regulated by Law 35/2006, of November 28, 2006, on Personal Income Tax, which establishes the following criteria for its determination:
- Permanence criteria: An individual has his habitual residence in Spain when he stays in Spanish territory for more than 183 days during the calendar year. In order to determine this period of permanence, sporadic absences are computed, unless he/she proves his/her tax residence in another country.
- Main nucleus of economic interests criteria: An individual has his habitual residence in Spain when he has in Spain the main nucleus or center of his economic interests. This criterion is generally applied when the requirements of the permanence criterion are not met.
Definition of the concept of “days spent” in Spanish territory
One of the keys to determine the residence of an individual in Spanish territory is the determination of the number of days of stay in such territory, especially taking into account the presumptions established in the applicable regulations (e.g. computation of sporadic absences).
In accordance with the most recent administrative doctrine, in the computation of the number of days of stay in Spain are taken into account:
Days of certified presence:
These are those days in which the physical presence in Spanish territory is accredited by some unquestionable means of proof (among others, card payments in physical establishments in Spain, use of means of transportation, access to public establishments, signing of contracts before a notary public, cash withdrawals at ATMs, etc.).
Days of presumed presence:
These are those consecutive days that reasonably elapse between two certified presences, in which physical presence in Spanish territory is presumed.
3. Days of sporadic absences:
These are those days in which the individual was not physically present in Spanish territory, but which are added to the days of effective presence (days of certified and presumed presence) for the purposes of calculating the 183 days.
For these purposes, as the Supreme Court has ruled, the sporadic nature of absences is defined by their nature and duration, the volitional element of the natural person being irrelevant.
The determination of tax residence is a complex concept that can have important tax implications and that, in view of the different presumptions existing in the applicable regulations, whose objective, undoubtedly, is to attract residence to Spanish territory, requires a case-by-case analysis, especially in those cases in which it is intended to rebut such presumptions.
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