Permanent Residency in two Countries

As a continuation of previous articles of Arcos and Lamers Asociados relating to the fiscal residence in Spain, we proceed to analyze what happens when a person is resident in both States.

We are faced with a situation where should be avoided that, under the applicable rules, someone can be considered, for tax purposes, as  resident in the two States.

To avoid that, it is necessary to follow the Agreement signed by the two Countries. We can say in general that, under the rules of these conventions, the person will be resident:

1.- At the State where he has a permanent home. If you have a permanent home in both States, you will be resident of the one where you have closer personal and economic relations.

2.- If thus cannot be determined, you will be a resident of the State where you normally live.

3.- If you usually live in both or none, you will be resident of the State of which you are a national.

  4.- If you are a national of both or none, the competent authorities will resolve the case by mutual agreement

As we have reported on other occasions, the status of non-resident in a particular State will be credited by obtaining a residence certificate issued by the tax authorities of another State. As a general rule, the period of validity of such certificates is one year.

As you may recall, an individual is considered resident in Spain in the following cases:

1.-Permanence more than 183 days during the calendar year, in Spanish territory.

2.-When the core of its activities or economic interests is located in Spain.

3.-When spouse and children, under legal age, habitually live in Spain in Spain.

With regard to legal entities, the following companies are considered residents in Spain:

1.-Companies set up under Spanish Laws.

2.- Companies with registered domicile in Spain.

3.- Companies with effective management in Spanish territory.

For any question related to your taxes or accountancy, please contact Arcos y Lamers Asociados. We have an expert team in legal and tax matters, who  will provide you with advice for your specific needs.