How to avoid Tax Residency/Wealth Tax in Spain?

#1

I’m planning to move to Spain this year, but Spain has a wealth tax for worldwide assets over 700.000€ if you are classified as a resident which I want to avoid.

I’ll try to be a short as possible:

  • I am a german citizen and I’m renting a flat in London, UK but haven’t stayed there a single day in 2016. (110 days in different countries in Asia, 10 days in Spain, 30 days in germany)
  • I own a flat in germany that I rent out to tenants (limited tax liability for the rental income in germany), but besides that I don’t have any income except for a few dividends from my stocks
  • I am planning to fly to Thailand for 2 months beginning of December 2016

Although I am renting the UK flat until December 2016 I prefer not to be in UK, which would mean that I would not be classified as a UK-resident because I would not meet any of the automatic UK or sufficient tie tests.

I’d like to move to Spain as soon as possible but would be willing to stay out of it for x weeks to avoid being classified as a resident and save wealth tax.

Can anyone help me in this matter? whats my best line?

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#2

Basically the 183 days rule applies so if you are there for under 6 months in a year you are fine. My experience based on what clients tell me from experience is that unless you are running a business in Spain (e.g van with logo, newspaper add or website with a Spanish phone number) you are not likely to attract Hacienda’s (Finanzamt) attention much the same as in the UK or Germany because there are loads of people working in the black economy locally who are easier targets.

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#3

Hi orca,

I appreciate your advice and I saw the 183 day rule as well, but I am worried that Spain could declare that I have “vital interest” in Spain and therefore count as a tax resident. (might be hard to disproof since I wouldn’t have a residency anywhere else)
Since the penalties are very severe I don’t want to take a risk and do it ‘the legal way’, or at least the most legal way possible.

I quote the penalties:
For failing to file Modelo 720 or filing it incorrectly: €5,000 per infraction (minimum fine of €10,000 for each group of assets). For voluntary, late submission: €100 per item (minimum €1,500 for each group of assets). In addition, the undeclared assets are treated as unrealised capital gains and consequently included in the general base of the income tax return for the earliest year Modelo 720 was established. An additional penalty of 150% of the unpaid income tax is also levied.

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#4

Drop a couple of hundred Euros and speak to a Spanish tax professional. This is not the right place to ask for such detailed advice. Each situation is unique so although someone might share an experience and you can get some ideas, the best idea would be to speak to a tax pro who can tell you about how to structure this since you’re talking about a considerable amount of money.

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#5

I am Spanish @s.ruthenboss.

You already know the short answer: you have to stay less than 183 days/ year within the country to avoid being classified as resident

The long:
http://www.agenciatributaria.es/AEAT.internet/Inicio/La_Agencia_Tributaria/Campanas/No_residentes/Impuesto_sobre_la_Renta_de_No_Residentes/Cuestiones_sobre_residencia/Persona_fisica_residente_en_Espana.shtml

The super-long: I can refer you a chartered accountant and reputed fiscal advisor with fair prices (my personal one)

P.S. imho seems you are over concerned, if you don’t have ties with the country (kids, assets, properties) they hardly could argue you are a resident, I seriously doubt it

Hope it helps

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