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Brexit, TIE and Spanish tax residence

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27 Aug 2020

Further to Brexit Withdrawal Agreement approved on 31 January 2020, UK nationals residing in Spain before the end of 2020 who want to live more than 90 days in our country as of 2021 should register as resident and get the TIE card.

TIE is an ID plastic card for foreigners to provide proof of legal situation in Spain. Those with a valid visa or residence authorization for more than 6 months can apply for it.

Someone who lives more than 183 days in Spain within a natural year is deemed tax resident, therefore, will be taxed on worldwide income and assets. Temporary absences do count as days spent in Spain (for example, someone living 150 days in Spain and traveling the world the rest of the year that cannot prove to be tax resident in a country with a Double Tax Treaty will add the days spent out of the country to the days spent in Spain). A day during any part of which, however brief, the taxpayer is present in Spain counts as a day of presence for purposes of computing the 183 day period.

Registering with the Spanish government and local town hall and getting the TIE does not make the taxpayer resident in Spain if it does not break the rules of 183 day period or centre of economical interest and remains tax resident in the UK. Under the withdrawal agreement UK nationals will be entitled to live more than 90 days out of 183 days in Spain, but if they don’t spend more than 183 days in total in a year and remain UK resident they will not be deemed tax resident.

It must be noted that the aim of the withdrawal agreement is to protect UK nationals living in Spain and the beneficiary must register as resident in Spain. The registration with the Town Hall is compulsory as to prove the residence in a municipality and the habitual abode. You must withdraw from the “padron” when changing your address to another municipality or country. If you keep your “padron” for more than 6 months it is a proof of your residence in that municipality. On the other hand, the TIE is available for those with a residence permit of more than 6 months.

Taking into account that proving the days spent in one particular place is not easy and considering that proving not to have been there is even harder and being the burden of the proof with the taxpayer, all the factors above mentioned are strong evidences of the intention to live permanently in Spain that could easily lead to a tax investigation on residence.

The Brexit Withdrawal Agreement is aimed to help UK nationals living in Spain to remain in the country. Trying to benefit from its rights without being tax resident in Spain could put the taxpayer in a weak position. 

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