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V0962-14 4 April 2014 · SG de Fiscalidad Internacional Criterion in force
IS · sede de dirección efectiva

A company may be tax resident in Spain if its effective management office is located here

A Polish engineer working for an English company from Spain asks whether the company has a permanent establishment and how both he and the company are taxed. The DGT states that a company will be tax resident in Spain if its management and control are exercised here and examines the criteria for personal tax residency.

The question raised

The taxpayer poses the following questions:

The DGT's ruling

An entity is resident in Spain if its place of effective management is located in the country, understood as the place where key commercial and management decisions are made. In the event of dual residence, the Convention with the United Kingdom prioritizes the place of effective management for companies. For natural persons, residence is determined by stay exceeding 183 days or the center of economic and family interests.

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