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Practical Manual for Companies 2023.

Residence and tax address

1. Home

Regulation: Article 8.1 LIS

Residence in Spanish territory determines the subjection to Corporate Tax. Entities that meet any of the following requirements are resident in Spanish territory:

  • That they had been constituted in accordance with Spanish laws.

  • That they have their registered office in Spanish territory.

  • That they have their effective management headquarters in Spanish territory.

    An organisation is considered to have its effective head office in Spanish territory when the management and control of the sum of its activities is exercised from the territory.

The tax authority may presume that an entity based in a country or territory classified as non-cooperative jurisdiction, has its residence in Spanish territory when:

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

  • Its main activity takes place in Spanish territory.

This presumption will not have effect when said entity proves that its management and effective administration take place in that country or territory, as well as that the constitution and operation of the entity responds to valid economic motives 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 November 29, on measures for the prevention of tax fraud.

2. Tax address

Regulation: Article 8.2 LIS

Taxpayers residing in Spanish territory must have a tax domicile that establishes a geographic point for the purposes of being able to interact with the tax authorities.

In this sense, the Tax regulations establish a order of priority to determine the tax domicile of the taxpayers:

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

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

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