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V2540-14 30 September 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · residencia fiscal

Fiscal residence determined by presence in Spain or centre of vital interests

A consultant asks whether their fiscal residence would be determined if employed by a Spanish company in Chile and they stay over 183 days there. The DGT explains that residence is determined by presence in Spain or the centre of activities, and in case of conflict, the Spain-Chile Double Taxation Agreement applies.

The question raised

In the event of being hired by a Spanish company in Chile and said company paying their remuneration as an expatriate, and, therefore, assuming they would spend more than 183 days in Chile, what would be their tax residence.

The DGT's ruling

If the inquirer does not prove tax residence in Chile, they shall be considered a resident in Spain according to the criteria of the Personal Income Tax Law (LIRPF). In the event of a conflict of residence, the Spanish-Chilean Convention shall apply to determine their residence based on permanent home or center of vital interests. If they are a resident in Spain and work in Chile for more than 183 days, employment income may be taxed in both countries. If they are a resident in Chile, they shall only be taxed in Spain on income from Spanish sources, such as the leasing of real estate in Spanish territory.

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