# How to file tax returns in 2 countries?



## AllHeart (Nov 22, 2013)

Yesterday I made it official to be a non-resident of Canada and a resident of Spain, by putting in an application to Canada for non-residency status. Wow!  It's now official, official!

I have income from Canada (not Spain), so I will have to file taxes for both Canada and Spain. I think the treaty between Canada and Spain is similar to other forum members' countries, in that there is no double taxing, in that taxes paid in Canada will be put towards taxes owed in Spain. 

My question is, when you file your taxes, do you do your 'home' country first, and then Spain? Or the reverse? 

Another question is, when is the deadline for filing Spanish tax returns?

Thank you in advance for your guidance.


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## AllHeart (Nov 22, 2013)

I found the answers here - thanks again to Advoco!

Spanish income tax rates 2012 to 2014

Taxes in Spain are due by June 30th.

So that answers my 2nd question.... Since taxes are due in Canada by April 30th, I'll have to file my Canadian tax return first.


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## 213979 (Apr 11, 2013)

AllHeart said:


> Yesterday I made it official to be a non-resident of Canada and a resident of Spain, by putting in an application to Canada for non-residency status. Wow!  It's now official, official!
> 
> I have income from Canada (not Spain), so I will have to file taxes for both Canada and Spain. I think the treaty between Canada and Spain is similar to other forum members' countries, in that there is no double taxing, in that taxes paid in Canada will be put towards taxes owed in Spain.
> 
> ...


It would be a really good idea to get in contact with the Canadian embassy in Madrid, especially given that it's your first year here. I have yet to find a competent authority who can help me with both my US and my Spanish returns.


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## AllHeart (Nov 22, 2013)

Hi Elenetxu. 

I don't know if I'm allowed to use the Canadian embassy here, since I'm a Spanish citizen here in Spain, not a Canadian citizen.

Is it the same with you, in that when you're in Spain you're a Spanish citizen, and when you're in the US you're an American citizen? If so, are you still allowed to use the US Embassy here in Spain?


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## xabiaxica (Jun 23, 2009)

AllHeart said:


> Hi Elenetxu.
> 
> I don't know if I'm allowed to use the Canadian embassy here, since I'm a Spanish citizen here in Spain, not a Canadian citizen.
> 
> Is it the same with you, in that when you're in Spain you're a Spanish citizen, and when you're in the US you're an American citizen? If so, are you still allowed to use the US Embassy here in Spain?


I'm sure they could advise you though - or maybe recommend a tax expert who knows about Spanish & Canadian taxes

you won't actually have to do your first tax return in Spain until June 2016 - you weren't tax resident in 2014 - the June 2015 return is for Jan to Dec 2014 - you weren't here long enough to be tax resident last year


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## AllHeart (Nov 22, 2013)

xabiachica said:


> I'm sure they could advise you though - or maybe recommend a tax expert who knows about Spanish & Canadian taxes
> 
> you won't actually have to do your first tax return in Spain until June 2016 - you weren't tax resident in 2014 - the June 2015 return is for Jan to Dec 2014 - you weren't here long enough to be tax resident last year


 Hi Xabiachica. OK, I'll contact them. Thank you.

I don't understand what you mean by tax resident. How long do I have to be in Spain for the year to be considered a tax resident?


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## xabiaxica (Jun 23, 2009)

AllHeart said:


> Hi Xabiachica. OK, I'll contact them. Thank you.
> 
> I don't understand what you mean by tax resident. How long do I have to be in Spain for the year to be considered a tax resident?


183 days Jan 1st to Dec 31st


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## AllHeart (Nov 22, 2013)

xabiachica said:


> 183 days Jan 1st to Dec 31st


 But does that rule apply to me as a Spanish citizen? I thought 183 days is for being able to claim residency for non-Spanish citizens. But you're saying this 183 days is for non-Spanish and Spanish citizens to claim tax residency? Is that correct?


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## xabiaxica (Jun 23, 2009)

AllHeart said:


> But does that rule apply to me as a Spanish citizen? I thought 183 days is for being able to claim residency for non-Spanish citizens. But you're saying this 183 days is for non-Spanish and Spanish citizens to claim tax residency? Is that correct?


Spanish citizens who don't live in Spain don't have to submit tax returns in Spain. Unless they have an income in Spain 
The 183 days is nothing to do with 'claiming residency' for anyone. It's the point at which anyone becomes tax resident


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## AllHeart (Nov 22, 2013)

xabiachica said:


> Spanish citizens who don't live in Spain don't have to submit tax returns in Spain. Unless they have an income in Spain
> The 183 days is nothing to do with 'claiming residency' for anyone. It's the point at which anyone becomes tax resident


 This is a really crucial point that you're bringing up, because what I'm doing is filing as a non-resident of Canada with Revenue Canada (federal government tax agency). If I am not a tax resident of Spain, then I am a tax resident of Canada.

So even though I used my Spanish passport to enter Spain, and even though I have rented an apartment since September, and have my DNI and Social Security and health card, and even though I've been using public healthcare for a few months, they still do not consider me a tax resident until I've been in Spain for 183 days?


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## brocher (Mar 21, 2011)

AllHeart said:


> This is a really crucial point that you're bringing up, because what I'm doing is filing as a non-resident of Canada with Revenue Canada (federal government tax agency). If I am not a tax resident of Spain, then I am a tax resident of Canada.
> 
> So even though I used my Spanish passport to enter Spain, and even though I have rented an apartment since September, and have my DNI and Social Security and health card, and even though I've been using public healthcare for a few months, they still do not consider me a tax resident until I've been in Spain for 183 days?


I Know nothing about Canadian tax but try thinking of it this way- even though you used your Canadian passport, rented a Canadian apartment, used Canadian services etc for 9mths of 2014......

I'm sure if you contact the Canadian tax authorities they will tell you the exact process for removing yourself from their system- and bear in mind you are still receiving a Canadian income. It's usual for the authorities to tell you when you are no longer considered non tax resident, rather than you telling them!

It would probably be easiest to employ an accountant with relevant experience to guide you through the transition.


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## SaxRocker (Sep 16, 2013)

If you are a Canadian non-resident you should look into electing under section 217 of the Income Tax Act. Also, if you own property in Canada that you are renting out check out section 216.


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## SaxRocker (Sep 16, 2013)

Also, if you file under section 217 your deadline is June 30th.


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## AllHeart (Nov 22, 2013)

brocher said:


> I Know nothing about Canadian tax but try thinking of it this way- even though you used your Canadian passport, rented a Canadian apartment, used Canadian services etc for 9mths of 2014......
> 
> I'm sure if you contact the Canadian tax authorities they will tell you the exact process for removing yourself from their system- and bear in mind you are still receiving a Canadian income. It's usual for the authorities to tell you when you are no longer considered non tax resident, rather than you telling them!
> 
> It would probably be easiest to employ an accountant with relevant experience to guide you through the transition.


 Hi Brocher. I have contacted the Canadian tax authorities (Revenue Canada) and they tell me that they cannot tell me how the decision is made by Revenue Canada as to whether or not I'm a non-resident. If I had the money, I would hire an accountant.

There is a form that I filled out last week for them to determine whether or not I'm a non-resident of Canada:

http://www.cra-arc.gc.ca/E/pbg/tf/nr73/nr73-12e.pdf

Under "Statement of Residency," they ask "Are you, under a tax treaty with another country, considered resident in the other country and not resident in Canada?"

I said yes, because I didn't know there is a difference between a resident (i.e. I have my empadronamiento) and a tax resident. This is something that's becoming apparent in this thread - that there is a difference between being a resident and a tax resident.

Also, last night I remembered something that may be relevant to this... When I signed for my empadronamiento, I had to sign a declaration that I was going to live in Malaga for at least 8 months, which is more than 183 days. So it occurs to me that I may have been a tax resident from the date of signing that declaration on my empadronamiento. 

It just doesn't make sense to me that Spain would allow me to live here and use all their services, especially their healthcare, without paying taxes.


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## AllHeart (Nov 22, 2013)

Hi SaxRocker. What Income Tax Act are you referring to? (No, I don't own property in Canada or here.)


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## 213979 (Apr 11, 2013)

AllHeart said:


> Hi Elenetxu.
> 
> I don't know if I'm allowed to use the Canadian embassy here, since I'm a Spanish citizen here in Spain, not a Canadian citizen.
> 
> Is it the same with you, in that when you're in Spain you're a Spanish citizen, and when you're in the US you're an American citizen? If so, are you still allowed to use the US Embassy here in Spain?


Oh sugar. I had forgotten about that. I would be surprised if they rejected you, just tell them straight up that you are a Spanish citizen who receives Canadian income. Then again, how does Canada feel about dual citizenship?

I am a Spanish resident and US citizen.


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## AllHeart (Nov 22, 2013)

elenetxu said:


> Oh sugar. I had forgotten about that. I would be surprised if they rejected you, just tell them straight up that you are a Spanish citizen who receives Canadian income. Then again, how does Canada feel about dual citizenship?
> 
> I am a Spanish resident and US citizen.


OK. I'll call them next week - the worst they can say is no. 

I have no idea how Canada feels about dual citizenship.

I'll also go to City Hall where I got my empadronamiento and ask them if they know if that declaration of 8 months staying in Malaga makes me a tax resident. 

If they don't know, I can also go to the Spanish tax agency and ask them. Would Seguridad Social be the correct people to go to for this? Or is the tax agency here another organisation?


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## SaxRocker (Sep 16, 2013)

The Canadian Income Tax Act


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## AllHeart (Nov 22, 2013)

SaxRocker said:


> The Canadian Income Tax Act


So I took a gander at the Income Tax Act of Canada:

http://laws.justice.gc.ca/PDF/I-3.3.pdf


 Goodness gracious me! I have a knack for easily understanding laws, for which I credit my Swedish grandpa, who was a judge. I've done quite a lot of work in my life with many different laws. But this?????!!!! Eff!  :noidea: :Cry:


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## kalohi (May 6, 2012)

AllHeart said:


> If they don't know, I can also go to the Spanish tax agency and ask them. Would Seguridad Social be the correct people to go to for this? Or is the tax agency here another organisation?


The Spanish tax agency is called Agencia Tributaria, although most people refer to it as Hacienda. It is not part of Seguridad Social. I'm sorry but I'm not familiar with Malaga so I can't tell you where they are located there. And good luck trying to interpret their webpage if you decide to have a look!


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## brocher (Mar 21, 2011)

Why would Cnada let you live their for nine months of 2014 without paying taxes? 

I'm not sure when the tax years runs from/ to in Canada but in Spain it is Jan - Dec, and in 2014 you spent the vast majority of your time in Canada, certainly nowhere near the 183 days needed to be tax resident in Spain.

Padron has nothing to do with it- and anyway most of the 8 mths you mention, will be in 2015, not 2014- so again, not relevant.


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## xabiaxica (Jun 23, 2009)

brocher said:


> Why would Cnada let you live their for nine months of 2014 without paying taxes?
> 
> I'm not sure when the tax years runs from/ to in Canada but in Spain it is Jan - Dec, and in 2014 you spent the vast majority of your time in Canada, certainly nowhere near the 183 days needed to be tax resident in Spain.
> 
> Padron has nothing to do with it- and anyway most of the 8 mths you mention, will be in 2015, not 2014- so again, not relevant.


that's what I'm thinking - Allheart must have been tax resident in Canada for 2014 - & will be / is tax resident in Spain from 2015 - making her first tax declaration in June 2016, for 2015, as I said in an earlier post

edit - the fiscal year in Canada is the same dates as Spain (googled it) so Allheart _must have been a tax resident in Canada for 2014_


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## brocher (Mar 21, 2011)

xabiachica said:


> that's what I'm thinking - Allheart must have been tax resident in Canada for 2014 - & will be / is tax resident in Spain from 2015 - making her first tax declaration in June 2016, for 2015, as I said in an earlier post


I agree.


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## AllHeart (Nov 22, 2013)

kalohi said:


> The Spanish tax agency is called Agencia Tributaria, although most people refer to it as Hacienda. It is not part of Seguridad Social. I'm sorry but I'm not familiar with Malaga so I can't tell you where they are located there. And good luck trying to interpret their webpage if you decide to have a look!


 Hi Kalohi. Thank you!  I found them: 

https://www.agenciatributaria.gob.e..._y_Melilla/Malaga/Delegacion/Delegacion.shtml


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## AllHeart (Nov 22, 2013)

Brocher & Xabiachica, I know I have to pay taxes for when I lived in Canada in 2014, using your rationale - I lived there and therefore should pay taxes. But using the same rationale, I'm thinking I may have to pay taxes for living in Spain as well for part of 2014. 

I hope you guys are right about the 183-day rule, so that I don't have to file Spanish tax return for 2014, because I'm already way over my head with all that I have to do! :juggle:

I think the definitive answer rests in the Canada-Spain Tax Treaty, since that's what they refer to as to my residency question. So I'm going to have a peak at it now.... (Drum roll, please.)


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## AllHeart (Nov 22, 2013)

Here's the Canada-Spain Tax Treaty, where I've highlighted all occurrences of "183 days:"

Canada Treaty Information - View Treaty - E102340

There is a 183-day rule, but it falls under Article XIV (Independent personal services) and Article XV (Dependent personal services), i.e. if I am working, which I am not.

Revenue Canada already told me that my pension and annuity income fall under Article XVIII, Pensions and annuities. There is nothing there about the 183-day rule.


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## xabiaxica (Jun 23, 2009)

AllHeart said:


> Here's the Canada-Spain Tax Treaty, where I've highlighted all occurrences of "183 days:"
> 
> Canada Treaty Information - View Treaty - E102340
> 
> ...


the treaty is immaterial - you weren't tax resident in Spain in 2014 - simple

http://www.advoco.es/hot-topics/39-do-you-need-to-submit-a-spanish-tax-return.html


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## AllHeart (Nov 22, 2013)

xabiachica said:


> the treaty is immaterial - you weren't tax resident in Spain in 2014 - simple
> 
> Do you need to submit a Spanish tax return?


 All of that information refers to foreigners - not Spanish citizens. It may be the same, but you and I both know that I've very often had different rules applied as a citizen, rather than a non-citizen.

The reason I bring up the treaty is because what I said earlier to Brocher, that the treaty and residency are what they asked me about in my application:



AllHeart said:


> There is a form that I filled out last week for them to determine whether or not I'm a non-resident of Canada:
> 
> http://www.cra-arc.gc.ca/E/pbg/tf/nr73/nr73-12e.pdf
> 
> ...


 So I may well have filled the form out wrong.


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## xabiaxica (Jun 23, 2009)

AllHeart said:


> All of that information refers to foreigners - not Spanish citizens. It may be the same, but you and I both know that I've very often had different rules applied as a citizen, rather than a non-citizen.
> 
> The reason I bring up the treaty is because what I said earlier to Brocher, that the treaty and residency are what they asked me about in my application:
> 
> ...


I think you maybe have 

why not pop down to the hacienda office & ask them if / when you become tax resident 

as I said - if you don't live in Spain for the qualifying number of days &/or don't have an income in Spain, you don't have to do a tax return in Spain

no matter what your nationality


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## AllHeart (Nov 22, 2013)

xabiachica said:


> I think you maybe have
> 
> why not pop down to the hacienda office & ask them if / when you become tax resident
> 
> ...


 OK. I'll do that. That's the easiest thing to do, eh? And they would be the authority on that. I hope I'm not an exception to the rule, because I really don't have it in me to do a Spanish tax return this year. I have so much on the go already, you know? 

Then if I did it wrong, I'll call Revenue Canada and see if there's any way I can fix the mistake.

Thanks all of you for your generous help. I'd be lost here in Spain without you guys.


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## AllHeart (Nov 22, 2013)

I called the Canadian Embassy, and was directed to the Consulate section. I spoke to a wonderful lady there and have her direct line now for any questions. We spoke about a whole lot of issues that I'm working on now and she is very knowledgeable. So I'm allowed to use the Canadian Embassy. I registered with them - my info as well as my power of attorney in Canada. Thanks Elenetxu for that suggestion!

Regarding residency status, she said that is up to Revenue Canada to decide, and that she can't really comment on that because it's very complicated how they decide.

Yesterday I went into the Hacienda, and they said there is indeed a 183-day rule, which is 183 days after getting my empadronamiento, I am considered a tax resident. At that point, she said I am supposed to go the Hacienda with proof that I paid taxes in 2014 in Canada. She said the taxes paid in Spain are not retroactive from the 183 days, meaning that I do not have to file Spanish taxes for 2014.

However, I then spoke to Revenue Canada (the tax agency in Canada), and they said the 183 rule means that if I stay beyond 183 days, if I haven't claimed residency in Spain by then, then I have to claim residency. He said taxes owed are retroactive for those 183 days. He said I am surely to already be considered under the Spain-Canada Treaty a resident under Article IV, fiscal domicile, section 1 to 2 (a):
*Article IV*

*Fiscal Domicile*

_1. For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the law of that State, is liable to taxation therein by reason of his domicile, residence, place of management or any other criterion of a similar nature._

_2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then this case shall be determined in accordance with the following rules:_

_*a) he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him.*.._
(Tax treaty Canada Treaty Information - View Treaty - E102340)

He is sure that the Hacienda was wrong in what they said, and he says I will have to file three tax returns for 2014 - two for Canada (as a resident to September and non-resident after September) as well as one for Spain after September. He said it will take about six weeks for Canada to decide whether or not I'm a non-resident of Canada. 

I don't think I have any choice but to wait to see what Revenue Canada decides on my residency status, and then take it from there. Unless someone else has suggestions?


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## xabiaxica (Jun 23, 2009)

Ha


AllHeart said:


> I called the Canadian Embassy, and was directed to the Consulate section. I spoke to a wonderful lady there and have her direct line now for any questions. We spoke about a whole lot of issues that I'm working on now and she is very knowledgeable. So I'm allowed to use the Canadian Embassy. I registered with them - my info as well as my power of attorney in Canada. Thanks Elenetxu for that suggestion!
> 
> Regarding residency status, she said that is up to Revenue Canada to decide, and that she can't really comment on that because it's very complicated how they decide.
> 
> ...


Hacienda IS correct about what is required in Spain....

I would just give Canada what Canada wants, & Spain what Spain wants....


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## AllHeart (Nov 22, 2013)

xabiachica said:


> Ha
> Hacienda IS correct about what is required in Spain....
> 
> I would just give Canada what Canada wants, & Spain what Spain wants....


 The problem is I can't be a non-resident of both countries at once! 

What I'm thinking is sending a follow-up letter to Revenue Canada explaining what Spain's rules on residency are and when I got my empadroniamiento (because I did not put that on the application). Do you per chance know the law that this 183-day rule falls under for residency? Or should I call the Hacienda to get this?

I'm thinking I'm stuck in the middle of two countries right now. Brings to mind one of my favourite songs - Stuck in the Middle With You.


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## AllHeart (Nov 22, 2013)

The guy I spoke to at Revenue Canada yesterday would not allow me to make the correction on my application to say that I am not a tax resident of Spain, because he said I am. He even would not make a note on the system that I called in to request to make this change. So it looks like I'm lying on my application. So that's why I'm thinking of writing them with a follow-up letter.

My thinking is that the people higher up who will be making this decision will be more knowledgeable than the guy I spoke to about the tax residency requirements in Spain.

When I was at the Hacienda yesterday, they said I could speak to someone higher up if I wanted to, but at the time it was clear what they said, so I opted not to. I'll go back tomorrow and talk to someone higher up to get the laws involved re residency, then put that in my letter as well as a copy of my empadronamiento. 

My experience is - especially with government - it is easier to do things right the first time than it is to undo a mistake.


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## xabiaxica (Jun 23, 2009)

you were tax resident in Canada for 2014

you will be / are tax resident in Spain in 2015, assuming you stay long enough


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## AllHeart (Nov 22, 2013)

xabiachica said:


> you were tax resident in Canada for 2014
> 
> you will be / are tax resident in Spain from 1st Jan 2015, assuming you stay long enough


 I just sent off a letter to Revenue Canada anyway, just to cover my buttocks, because I did say I am a resident here when in fact I am not. 

Yes, that's assuming I stay alive long enough - otherwise I'm not leaving. They made a joke about it at the Hacienda, saying that now I know that I have to stay alive until at least April so that I can die a Spanish resident.


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## xabiaxica (Jun 23, 2009)

AllHeart said:


> I just sent off a letter to Revenue Canada anyway, just to cover my buttocks, because I did say I am a resident here when in fact I am not.
> 
> Yes, that's assuming I stay alive long enough - otherwise I'm not leaving. They made a joke about it at the Hacienda, saying that now I know that I have to stay alive until at least April so that I can die a Spanish resident.


July actually - you won't be tax resident until you clock up 183 days in 2015


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## AllHeart (Nov 22, 2013)

So that's three different opinions:

Canada Revenue says when I arrived - Sep 2014

The Hacienda says 183 days after my empadroniamentio - April 2015.

And you're saying 183 days after January 2015 - July 2015.

:confused2:

Brings to mind another song I like, "Things That Make you Go Hmmmmm."


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## xabiaxica (Jun 23, 2009)

Tax Agency - Individual resident in Spain


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## AllHeart (Nov 22, 2013)

Sorry but I forgot my manners in giving 'likes' for those of you who have helped me out here. So I just did that. 



xabiachica said:


> Tax Agency - Individual resident in Spain


Xabiachica you did it!!!! That's exactly what I need. So Spain does exactly what Canada does in determining residency. The guy I spoke to at Revenue Canada said because I have virtually no ties in Canada and no intention on returning to live there, but I have ties here in Spain, I will be deemed a Spanish resident. If you look at the questions in my Canadian non-residency application, that's what all their questions add up to - where are my strongest ties, in Canada or Spain? Again, here is their application:

http://www.cra-arc.gc.ca/E/pbg/tf/nr73/nr73-12e.pdf

This is the same in the link you provided, where I'll use red font where Spain will likely also consider me a resident:

*An individual is resident in Spanish territory when any one of the following circumstances apply: *


*They have stayed longer than 183 days in Spanish territory over the calendar year. In order to determine the permanence in Spanish territory, occasional absences are included, except if the taxpayer accredits their residency in another country. In the case of countries or territories labelled as tax havens, the Tax Administration can demand proof of stay in that tax haven over a period of 183 days within the calendar year.*
*They situate the main base or centre of their activities or economic activities, directly or indirectly, in Spain.*
*They have dependent not legally separated spouse and/or underage children who are usually resident in Spain. This latter situation accepts evidence to the contrary.*
*...**Otherwise, where none of the previous situations applies, an individual is considered as non-resident in Spain.*

So by the looks of it, I will be deemed a Spanish resident both by Canada and by Spain. I'll wait to see what Canada says, then go to the Hacienda with Canada's decision and see what they say. Perhaps the Hacienda has a similar form with questions to determine residency.

Again, thank you all for your help! You guys on the form make the world a better place.


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