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On Being a Spanish Tax Resident: 8 Important Points

1. If you reside in Spain, or if you own a property and are non-resident, you need a Numero de Identificación de Extranjeros (NIE). The fiscal identity numbers displayed on this green card identify you to the Spanish taxman and are required to work, pay taxes or have any dealings with the Hacienda (Spanish tax office).

2. In order to prove fiscal residency in Spain you need a Certificate of Fiscal Residency granted by the Agencia Tributaria (Spanish Tax Office). In order to obtain one, it is beneficial to have a copy of your Spanish tax return or tax declaration for the last three years. The Fiscal Residency certificate proves residency where there is an inheritance claim and can make a big difference to the amount of inheritance tax payable.

3. The definition of 'Resident' for Spanish tax purposes is determined by one or more of the following: if you spend more than 183 days residence in Spain during the calendar year (January to December) or if your main centre of activity or economic interests is based in Spain whether directly or indirectly.

4. According to Spanish law, once you fulfil the above criteria, you become liable to pay Spanish taxes regardless of whether or not you obtain a formal residence permit (Residencia). Sporadic or temporary absences will not interrupt residency unless the taxpayer demonstrates tax residency in another country.

5. It is automatically presumed that an individual will be a Spanish Resident if his/her non-legally separated spouse and minor dependent children have their habitual residence in Spain, unless proven to the contrary.

6. Special rule is applicable if claiming residence in a tax haven country (e.g. Gibraltar) – liable taxpayers would need to prove actual residence in that country for more than 183 days within the relevant tax year.

7. In cases where the taxpayer has economic interests in more than 1 country, the tax authorities will take into consideration the weight of each interest, as well as the intensity of social, political and family relationships in each of such countries, or having a permanent dwelling in -or nationality of- that country.

8. Spanish authorities may apply for information from countries with whom a tax information exchange agreement has been signed; the UK is one of such countries.

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