Establishing tax residency may seem straightforward, but in practice it is a complex process filled
with legal nuances that vary significantly between countries. These differences can lead to
paradoxical situations, especially for individuals who live, work, or invest across borders.
Spain: The 183-Day Rule and Econornic Nexus
Spain considers an individual a tax resident if they spend more than 183 days in the country during the calendar year.
AII days of physical presence count, even if only for a few hours, and overnight stays are not required. Sporadic absences are also included unless the person can prove tax residency in another country. A person is also deemed a tax resident if their main economic interests or business activities are based in Spain, or if their spouse and minar children live there. Even a single transit day through a Spanish airport may count as a day of residence.
United Kingdom: Overnight Stay and Personal Ties
The United Kingdom applies the Statutory Residence Test (SRT) to determine tax residency. This test takes into account the number of days spent in the UK with an overnight stay, as well as personal and professional ties and the availability of a home in the country. Spending 183 days or more in the UK during a tax year automatically makes an individual a tax resident. For those who are no longer residents but still maintain a home in the UK, staying more than 90 days per year can result in regaining tax residency status. Only days that include an overnight stay are counted, except for specific exemptions such as transit stops or aircrew duties. Additionally, from April 2025, non-domiciled individuals are required to pay taxes on their worldwide income, ending the previous preferential regime.
Netherlands: Centre of Life Over Number of Days
In the Netherlands, the number of days spent in the country is not the main criterion for determining tax residency.
lnstead, the focus lies on the centre of an individual's personal and economic life - where their habitual residence is, where their family lives and works, and where their bank accounts, insurance, and medical services are located. Although spending more than 183 days in the Netherlands may indicate residency, it is not a decisive factor. A person may still be considered a tax resident even with fewer days, if their life is primarily centred in the Netherlands
The Paradox of Dual Residency
lt is entirely possible-and often legally complex-to be considered a tax resident in more than one country.
For instance, a person who works in Spain during the day but returns to the UK to sleep could be treated as a resident in both jurisdictions: Spain, due to physical presence and economic activity, and the U K, due to overnight stays and personal ties. These situations require careful tax planning to prevent double taxation and ensure full compliance with the laws of each country.
Why Expert Advice Matters
Investing in Spain requires more than signing a contract - it demands understanding where and how to pay taxes, avoiding double taxation, and structuring operations correctly. Tax planning is essential.