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V1447-17 7 June 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · residencia fiscal

Tax residency determined by physical presence or economic activities, not census data

A consultant moving to Qatar asks whether their tax residency changes and if they qualify for the foreign employment exemption. The DGT explains that tax residency depends on physical presence or the economic centre of activities, and that the exemption requires proof that the work is carried out for a non-resident entity in a country with a similar tax regime.

The question raised

Question raised 1) Tax residence of the consultant. Whether they would have to be taxed as a non-resident for tax purposes in Spain, providing a certificate of tax residence in Qatar. Whether the fact of being registered in the aforementioned professional activities would influence such classification as a non-resident.

The DGT's ruling

Tax residence is determined by remaining in Spain for more than 183 days or by having the core of activities or economic interests within Spanish territory. To apply the exemption for work performed abroad, one must work for a non-resident entity and an identical or analogous tax to the Personal Income Tax (IRPF) must be applied in the destination country. If the taxpayer is a non-resident, they shall only be taxed in Spain on income from Spanish sources, such as economic activities carried out in Spain or income from employment derived from a personal activity developed within Spanish territory.

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