Tax residence classification in Spain and remote work from the US

Hello,

This is my first posting on this forum, so as suggested, I will quickly introduce myself.

I am 40, married. I have a 14-year old son. I was born in Mostar, Bosnia. When I was 9, my family moved to Saint Paul, MN, US where I lived for 30 years. I moved to Spain in July of 2019 after being offered an IT analyst job in Barcelona.

My wife and son remained in the US, and while we visited back and forth frequently, the plan was to move the entire family to Barcelona sometime in 2020. Unfortunately. due to the pandemic, this plan had to be put on hold. After spending over two months in complete isolation during the first lockdown in Barcelona, I decided to go back to the US to rejoin my family, and fortunately, was allowed to continue working remotely from the US for my Spanish employer.

If the time spent in Barcelona in 2020 was the sole criteria to determine whether I am a tax resident in Spain in 2020 or not, given the fact that I resided in the US for over 7 months in 2020, I would be considered a tax non-resident.  However, with the fact the  during this entire stay in the US, I worked for my Spanish employer — the work which under non-pandemic circumstances I would have done at the office in Barcelona, and also,  given the fact that during this entire stay in the US, I have kept an apartment/address in Barcelona with the goal of returning there as soon as things normalize, perhaps I am still to be considered as a tax resident in Spain in 2020. 

I will have to return to Barcelona next month as my employer will no longer allow for working remotely while residing outside Spain. At the time I return, I will have been away from Barcelona for 8 months.

I should probably mention that I'm a US citizen with residence/work permit/NIE in Spain.

If any of you has any insight into this matter, or has dealt with a similar situation, and can either offer a suggestion, comment, or advice, that would be much appreciated.

Thanks,
Elar

Hi, I would recommend working with an accountant to clarify the issue. Last year we used the services of Spain Accountants (https://www.europeaccountants.com/spain/index.html) and were very happy with them, no too expensive and very professional. By the way, we also moved here from St. Paul, MN. In 2016. Good luck

I recommend "Spanish Solutions", tel.  966 761 741 , ask for Ana Barbadora.
As a matter of interest how does St. Paul , MN compare with where you live now in Spain? Do you have a better life now ? What made you come here ?

kcristina wrote:

Hi, I would recommend working with an accountant to clarify the issue. Last year we used the services of Spain Accountants (https://www.europeaccountants.com/spain/index.html) and were very happy with them, no too expensive and very professional. By the way, we also moved here from St. Paul, MN. In 2016. Good luck


Thank you Cristina! Very nice to meet you here on the forum.

deltafm wrote:

I recommend "Spanish Solutions", tel.  966 761 741 , ask for Ana Barbadora.
As a matter of interest how does St. Paul , MN compare with where you live now in Spain? Do you have a better life now ? What made you come here ?


Thanks! deltafm,

To answer your question, the primary reason why I came to Barcelona is that my and my wife extended families and many friends live all over Europe. We don't have any family in Barcelona, but I Barcelona is indeed a nice, and warm, and very friendly city from which, under normal (non-pandemic) circumstances, it's relatively easy to reach other places in Europe.

For someone from Barcelona coming to Minneapolis, one striking difference would be climate. The climate here in St Paul is very severe in comparison to mild climate Barcelona has. On a good day during the winter, temperature here is around 0C. But there are times when you can have a whole month of temperatures below -20C,  and I have experienced temperature as low as -55C here. Not very common, but it did happen.

If, however, you came to St Paul in May or September, the city would strike you as beautiful. The weather would be around 20C, the trees would be so lush green in May, or starting to change colors in autumn. With many strolling and bike paths around many of its lakes and parks, you would have an impression of a gorgeous city.

And this is only on surface, and a very superficial glimpse at it as there are many other differences, some of them stem form the fact that most midwestern cities can be geographically so spread out that this impacts how life in the city is organized. Some of them have to do with the way education, healthcare, etc. are funded, and the acceptable and dominant ideas of social welfare. It would indeed be a long conversation to discuss all the different topics relevant to life in once city vs the other, but if you have interest in specific topics, please let me know, and I would be happy to provide my personal insight into them.

Cheers

The tax residency issue is straightforward. The Spanish tax year runs from 01 Jan to 31 Dec (ie a calendar year). If you physically spend more than 183 days (not necessariy consecutive) in a single calendar year in Spain you are a tax resident. That means you are liable to pay tax (to Spain) on ALL your earnings, from all sources globally, in that year, regardless of where else you were located at any one time, and even if you have already paid taxes in another jurisdiction.

I'm puzzled. You said that you moved to Spain in July 2019. Surely between then and now you must have filled in a tax return somewhere?

I'm also puzzled that you are asking such financially and legally important questions in a forum, when your top priority should be to pick up the phone and call a tax accountant/lawyer.

Today.

I would like to at least chime in on comparisons between St. Paul and Barcelona... humans live in both places. Other than that, St. Paul, is a barren wasteland, and Barcelona is, well Barcelona!

Sorry I couldn't help it. We plan on moving to Spain (either Madrid or Bilbao) in 2022,  but still reside in St. Paul. The low temps have been -20C to -30C for the last week. It looks and feels like arctic tundra  right now.

Elar, it does seem your situation might warrant. lawyer. In my own research of the same topics, it seems that residency laws in Spain are changing rapidly—hence the noise to signal ratio with information.  And, on the positive side, i would wonder if working for the Spanish employer would help qualify you for national health care. Others may chime in (and burn me alive), but a good lawyer might make a difference in your case.  Just my humble opinion.