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Practical Handbook for Companies 2021

Residence and tax address

1.Residence

Regulation: Article 8.1 LIS

Residence in Spanish territory determines the subject to corporate income tax.residents in Spanish territory are entities in which any of the following requirements are met :

  • That had been constituted in accordance with Spanish law.

  • must have its registered office in Spanish territory.

  • must have its effective place of management in Spanish territory.

    An entity shall be deemed to have its effective centre of management in Spanish territory when the management and control of all its activities are located there.

The Tax Administration may presume that an entity located in any country or territory classified as a non-cooperative jurisdiction, has its residence in Spanish territory when:

  • Its main assets, directly or indirectly, consist of assets located or rights that are fulfilled or exercised in Spanish territory.

  • Its main activity is carried out in Spanish territory.

This presumption shall have no effect where such an entity proves that its direction and effective management take place in that country or territory and that the entity is established and operates for valid economic and substantive business reasons other than the management of securities or other assets.

You can consult the definition of non-cooperative jurisdiction in the first additional provision of Law 36/2006, of 29 November, on measures for the prevention of tax fraud.

2. Domicilio fiscal

Regulation: Article 8.2 LIS

Taxpayers resident in Spanish territory must have a tax domicile that establishes a geographical point for the purpose of dealing with the tax authorities.

In this regard, the tax regulations establish an order of priority to determine which taxpayers' tax domicile will be:

  • The registered office, provided that the administrative management and management of its business is effectively centralised there.

  • If the criterion of the registered office cannot be applied, the place where the management or address is carried out shall be taken into account .

  • In cases where the place of domicile for tax purposes cannot be established in accordance with the above criteria, the place where the highest value of the fixed assets is located shall prevail .