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Non-Resident Taxation Manual (July 2024)

Residence of legal entities

Internal regulations

Regulations: Article 6 Law IRNR

An entity will be considered resident in Spain when it meets any of the following criteria:

  • It was incorporated according to Spanish Law.

  • It has its registered address in Spanish territory.

  • Its effective head office is 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.

In the event of a change of residence the tax period will end when said change takes place.

The tax authorities may presume that an entity established in a country or territory with zero taxation, or classified as a tax haven (with effect from July 11, 2021, references made to tax havens or countries or territories with zero or low taxation are understood to be made to the definition of non-cooperative jurisdiction). See Annex IV ), is resident in Spanish territory when its main assets, directly or indirectly, consist of property located or rights that are fulfilled or exercised in Spanish territory, or when its main activity is carried out in this territory, unless it is proven that its direction and effective management take place in that country or territory as well as that its constitution and operation respond to valid economic motives and substantive business reasons other than the simple management of securities or other assets.

Agreement and double residence

If there is an agreement, when an organisation is considered to be resident in both States, the agreements establish in general that it will be considered as resident only in the State where its effective headquarters is located.

Proof of tax residency

A legal organisation proves its tax residence in a specific country by means of a certificate issued by the Tax Authority. The period of validity of these certificates is one year. The certificate shall be valid indefinitely if the entity subject to tax is a foreign country, one of its political or administrative subdivisions or its local entities.