February 2, 2018
On 28 November 2017, the Spanish Supreme Court passed a judgement relating to the concept of fiscal residence in Spain for individuals.
In this judgement, the Supreme Court reiterates that true residence outside of Spain that is recognised by the Spanish Tax Agency and exceeds 183 days during the calendar year, which corresponds with the tax year, is an objective fact that should prevail over elements that are subjective in nature and whose interpretation is left to the Tax Agency to decide. In fact, the Supreme Court also confirms that a subjective element such as that of future intention to reside in another jurisdiction is difficult to demonstrate in practice in advance, especially in the current context where there is a high level of geographical mobility of people.
This information is relevant for clients with an international profile and high geographical mobility whose fiscal residence (or non-residence) in Spain is difficult to determine according to the current criteria set by the Tax Agency in practice. In fact, in our opinion, this new judgement clarifies that the time criterion of residence based on physical presence in Spain (i.e. an objective criterion determined by the “183 day” rule) should prevail over other elements that are subjective and intentional in nature, upon which the Tax Agency may act with a certain degree of discretion.
Therefore, in conclusion, we believe this constitutes a jurisprudential position that enhances legal certainty for those clients that might have this problem.
Finally, we would like to remind you that we offer this type of client, with high geographical mobility and significant net worth, tailored solutions that can be “portable” and also avoid the “Exit Tax” (“Impuesto de salida”), where applicable, in multiple jurisdictions – including Spain.
We of course remain entirely at your disposal to clarify any doubts you may have regarding the possible implications of this judgement by the Supreme Court or any other element relating to estate planning through “unit-linked” insurance policies for your clients resident in Spain or abroad with the intention of relocating to Spain.
Author: 
José Manuel Tara, Regional Director Iberia & Latam, at OneLife
Should you need additional information in relation to unit-linked products for Spanish resident investors, do not hesitate to contact our Sales representatives:
Luis De La Infiesta, Regional Sales Director Iberia & Latam, at OneLife at OneLife
Gonzalo Garcia-Perez, Wealth Planner Manager for Iberia and Latam markets, at OneLife
