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V1164-20 29 April 2020 · SG de Tributos Criterion in force
IRPF · domicilio fiscal

Tax residence for individuals may be the place where their economic activity is managed

A taxpayer has enquired whether they can maintain their tax residence at the location where they carry out their economic activity after changing their habitual residence. The Directorate General for Taxes (DGT) explains that while habitual residence is the general rule, exceptions exist for those primarily engaged in economic activities.

The question raised

Issue raised: Tax residence of natural persons when carrying out an economic activity at a location other than their residence.

The DGT's ruling

As a general rule, the tax residence of natural persons is their habitual residence. However, for those who primarily carry out economic activities, the Administration may consider the place where the administrative management and direction of the activities are centralized as the tax residence. It is considered that economic activities are primarily carried out when more than half of the general tax base of the Personal Income Tax (IRPF) of the previous year derives from net income from economic activities, or if this percentage has been met in each of the three previous years.

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