Causality requirements to access the special tax regime for displaced workers

The application of the special tax regime provided for in Article 93 of the Personal Income Tax Law (LIRPF) requires compliance with strict conditions that go beyond mere residence. The Directorate General of Taxes (DGT) has specified the necessary elements for a professional to benefit from this tax treatment when moving to Spain.

What the DGT has ruled

The binding ruling determines that, to access the special regime, the move to Spain must be a direct consequence of acquiring the status of an administrator. Mere presence in the territory is not enough; there must be a causal link that the interested party must prove through valid means of evidence.

Furthermore, other fundamental requirements have been highlighted:

• Not having been a resident in Spain during the five years prior to the move.
• Not obtaining income derived from a permanent establishment in Spanish territory.
• In the case of asset-holding entities, the administrator may not hold a stake that makes them a related party.

What this means for you

If you are a professional moving to Spain to take up an administrative position, the burden of proof lies with you. You must be able to demonstrate that your arrival in the country is the result of your appointment as an administrator and not an isolated or prior event. The nature of the company where you serve is also decisive; if the entity is an asset-holding company, your shareholding structure will be analyzed to ensure there are no links that invalidate the regime.

What you should do

It is necessary to evaluate the shareholding structure in the entity and the documentation supporting the reason for the move before requesting the application of this regime. Since the administration of evidence is key, it is recommended to analyze whether the facts allow for the proof of causality required by the current regulations in the LIRPF and the Corporate Tax Law (LIS).