Tenirife is undoubtedly one of the most attractive destinations for both tourists and foreign residents. However, many of them face a key question when they settle on the island or have economic ties to Spain: when should a foreigner file a tax return in Spain?

In this article by Asesoría Quintero, we will answer this question, focusing on the requirements and particularities that affect non-residents and those who spend long periods in the country.

Who is considered a tax resident in Spain?

The first point to consider to know whether a foreigner should file their tax return is to determine their tax residency. According to Spanish law, a person is considered a tax resident if they meet any of the following criteria:

• They have stayed more than 183 days in Spanish territory (including Tenerife and other regions of the country) in a calendar year.
• They have in Spain the main center of their activities or economic interests, meaning their source of income.
• They have a spouse and/or dependent minor children living in Spain, as long as it cannot be proven that they are tax residents in another country.

Those who meet these conditions are considered tax residents in Spain and are therefore required to file their Income Tax Return (IRPF) like any other Spanish citizen.

Tax return for non-residents in Spain

On the other hand, foreigners who do not meet the requirements for tax residency in Spain may still be required to file a tax return as non-residents. This is especially relevant for those who:

• Own a property in Tenerife or in any other part of Spain.
• Earn income from Spanish sources, such as rentals, pensions, or investments.

We delve into this topic in more detail in our article on the “Model 210 Tax Return: What You Need to Know as a Non-Resident When Buying Property in Tenerife”, but in summary, the Non-Resident Income Tax (IRNR) must be filed in the following cases:

• If they own a property in Tenerife that they do not rent out, they must file a tax return imputing a presumed rental income for the property.
• If the property is rented out, they are required to declare and pay taxes on the rental income obtained.
• If they earn income from investments in Spain, such as bank interest, this must also be declared.

Deadlines for filing a tax return for foreigners in Spain

Foreigners who must file a tax return in Spain as tax residents follow the same schedule as Spanish citizens. Generally, the tax season opens in early April and runs until the end of June. During this period, the tax return must be filed either online or in person.

For non-residents, the deadlines depend on the type of income that must be declared. For example, if they own a property in Tenerife, they must file the IRNR tax return before December 31st of the year following the accrual of income.

International double taxation

One of the main concerns for foreigners in Tenerife is the possibility of double taxation, meaning being taxed both in Spain and in their home country on the same income. To avoid this issue, Spain has signed double taxation agreements with many countries, allowing taxes paid in one country to be deducted or exempt in the other.

It is important for foreigners who live or own assets in Tenerife to check whether their home country has a double taxation agreement with Spain and to ensure compliance with tax regulations in both countries to avoid penalties or tax burdens. Click here to see if your country has signed a double taxation agreement with Spain.

Living or investing in Tenerife can be a unique experience for foreigners, but it also involves complying with the country’s tax obligations. Determining whether you should file a tax return depends mainly on your tax residency status and the income you generate in Spain.

If you are a foreigner and need advice on filing your tax return in Tenerife, our consultancy is at your disposal to help you comply with all the current regulations, avoiding unpleasant surprises or penalties. Be sure to consult an expert to manage your taxes efficiently and take advantage of any tax benefits that may apply to your situation.

Need help with your tax situation in Tenerife?

Don’t hesitate to contact us for personalized advice and ensure that your tax obligations are fulfilled correctly and efficiently.