Must I declare my income in France or in Spain?

The answer depends neither on nationality nor on the location of the assets, but primarily on the rules relating to tax residence and the application of the Franco-Spanish tax treaty. An incorrect analysis may lead to double taxation, failures to declare or a reassessment.

The determining principle: tax residence

The country in which you must declare all of your income depends primarily on your tax residence.

Several criteria are examined by the authorities:

• the time spent in each State
• the location of the family home
• the place of professional activity
• the centre of economic interests

These criteria may produce different outcomes depending on the taxpayer’s personal situation.

To understand how these elements are assessed, consult the page: Tax residence between France and Spain

The main criteria used by the authorities

Number of days of presence

The 183-day rule is a common reference point but it is never sufficient on its own.

The family home

The location of the spouse and children may take precedence over time spent.

Professional activity

The habitual place where the work is carried out is decisive in many situations.

The centre of economic interests

This may be the place where the main investments, companies or sources of income are located.

Typical cases of error

Certain preconceived ideas regularly lead to difficulties:

• thinking that an NIE is sufficient to become tax resident
• believing that paying local taxes means being resident
• assuming that a second home automatically changes the situation
• ignoring the impact of the family’s location

These errors are often discovered during an audit or an exchange of information between authorities.

The essential role of the Franco-Spanish tax treaty

Where both States consider that a person could be resident in their territory, the tax treaty determines which country has the primary taxing rights.

It provides successive tie-breaker rules, in particular:

• the permanent home
• the centre of vital interests
• the habitual abode

Why a personalised assessment is essential

No cross-border situation can be resolved by an automatic rule.

The classification as tax resident may depend on details such as:

• the exact date of departure or arrival
• the nature of the income received
• the structure of the assets
• the family situation
• the existence of companies or investments

An approximate analysis may have significant financial consequences several years later.

Need a clear and secure position on your situation?