One of the most important issues we have to face when moving to a foreign country is to find out what our tax liabilities are. Before starting any business or starting to work abroad it is advisable to consult a tax lawyer who is familiar with taxation laws in your home country and with those rules from the place you will move to.
In Spain, the way in which individuals and bodies corporate pay tax varies depending on whether or not they are tax resident in Spain.
According to the Spanish tax rules, individuals shall be deemed to have their principal residence in Spain if they meet any of the following conditions:
§ They spend more than 183 days per calendar year in Spain. Occasional absences shall be taken into account to calculate the period of residence, except when said individuals prove they have their tax residence in another country. In the case of countries or territories classified as tax havens, the Spanish tax authorities may request proof of residence in the tax haven for 183 days per calendar year.
§ Their main or central place of business is directly or indirectly located in Spain.
§ Unless there is evidence to the contrary, an individual shall be deemed to be a resident of Spain if, in accordance with the aforementioned criteria, his or her legally non-separated spouse and dependent minor children have their principal residence in Spain.
Individuals of Spanish nationality who prove they have changed their country of residence to a tax haven shall continue to be liable for Personal Income Tax in Spain for the tax period in which the change of residence occurs and the following four tax years.
As a non-resident you will only be taxed on your Spanish earnings, on the contrary if according to the above mentioned rules, you have to be considered as a Spanish tax resident, you will be taxed on your worldwide income.
Tax residence will determine your tax income contribution but it also will imply certain tax obligations with tax authorities in the country you move to as well as with those located in the place you are leaving.
To most, the idea of leaving the country simply means deciding on a destination, buying a one-way ticket and packing your suitcase. However, overlooking tax formalities could leave you with unnecessary complications. If you are a taxpayer, you should have a legal or tax expert who is able to explain why it is that you are paying as well as ensuring that the filing is done correctly. After all, why pay more than you have to?
Amo Peralta Abogados – Almería
