will Europe Tax the s**t out of me with this residency set up?

[banafinfodafuggiano]

European Citizen (Spain). Running the business through a UAE Company selling services to clients across the world.

- 3-4 Months a year in Spain living in my own house bought through a mortgage (the rest of the year is rented out on Airbnb)
- 3-4 Months a year in various East European countries staying in Airbnbs
- 1 Month a year back to Canada (wife's home country and my second nationality)
- 2 Months in Abu Dhabi living in my own apartment bought through a mortgage (Still paying for it)

These amounts could change for example one year I would do 5 months in Spain and 7 months in UAE and another year 1 month in Spain and 11 months across Asia travelling as a nomad.


What country will own me in such scenario since I can clearly show I am a "resident" of the UAE and paying a mortgage over there?
Consider that I'm soon leaving Canada tax system and I have not lived in Spain for the last 10 years so Spain Tax agencies shouldn't technically f**k around too much if I spend a quarter of a year over there?

 

[scooterguy]

If you're not really a tax resident of UAE, Spain could have a strong case against you, especially because in the UAE-Spain tax treaty, citizenship and having a home available are important elements to determine residency if you're not a tax resident of neither country: BOE-A-2007-1343 Convenio entre el Reino de España y los Emiratos Árabes Unidos para evitar la doble imposición y prevenir la evasión fiscal en materia de impuestos sobre la renta y sobre el Patrimonio, hecho en Abu Dhabi el 5 de marzo de 2006..

I think that you will need to spend at least 90 days a year in UAE, have a home available there and make sure you never spend 6 months in Spain.

 

[banafinfodafuggiano]

If you're not really a tax resident of UAE, Spain could have a strong case against you, especially because in the UAE-Spain tax treaty, citizenship and having a home available are important elements to determine residency if you're not a tax resident of neither country: BOE-A-2007-1343 Convenio entre el Reino de España y los Emiratos Árabes Unidos para evitar la doble imposición y prevenir la evasión fiscal en materia de impuestos sobre la renta y sobre el Patrimonio, hecho en Abu Dhabi el 5 de marzo de 2006..

I think that you will need to spend at least 90 days a year in UAE, have a home available there and make sure you never spend 6 months in Spain.

I thought the Tax residency certificate in UAE is issued after 180 days spent within the UAE and not 90 Days?

 

[scooterguy]

I thought the Tax residency certificate in UAE is issued after 180 days spent within the UAE and not 90 Days?

It's 90 days if you have a home or hold a residence permit.

 

[JackAlabama]

European Citizen (Spain). Running the business through a UAE Company selling services to clients across the world.

- 3-4 Months a year in Spain living in my own house bought through a mortgage (the rest of the year is rented out on Airbnb)
- 3-4 Months a year in various East European countries staying in Airbnbs
- 1 Month a year back to Canada (wife's home country and my second nationality)
- 2 Months in Abu Dhabi living in my own apartment bought through a mortgage (Still paying for it)

These amounts could change for example one year I would do 5 months in Spain and 7 months in UAE and another year 1 month in Spain and 11 months across Asia travelling as a nomad.


What country will own me in such scenario since I can clearly show I am a "resident" of the UAE and paying a mortgage over there?
Consider that I'm soon leaving Canada tax system and I have not lived in Spain for the last 10 years so Spain Tax agencies shouldn't technically f**k around too much if I spend a quarter of a year over there?

be careful with spain but otherwise seems ok.

 

[Cloudbanck]

European Citizen (Spain). Running the business through a UAE Company selling services to clients across the world.

- 3-4 Months a year in Spain living in my own house bought through a mortgage (the rest of the year is rented out on Airbnb)
- 3-4 Months a year in various East European countries staying in Airbnbs
- 1 Month a year back to Canada (wife's home country and my second nationality)
- 2 Months in Abu Dhabi living in my own apartment bought through a mortgage (Still paying for it)

These amounts could change for example one year I would do 5 months in Spain and 7 months in UAE and another year 1 month in Spain and 11 months across Asia travelling as a nomad.


What country will own me in such scenario since I can clearly show I am a "resident" of the UAE and paying a mortgage over there?
Consider that I'm soon leaving Canada tax system and I have not lived in Spain for the last 10 years so Spain Tax agencies shouldn't technically f**k around too much if I spend a quarter of a year over there?

See here:

https://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-residency/Spain-Tax-Residency.pdf

It says "Individuals of Spanish nationality who accredit their new fiscal residence in a country or territory labelled as a tax haven will not lose their status as taxpayers for Individual Income Tax. This rule is of application during the tax period in which the change of residence occurs and for the next four tax periods."

So if you were moving out from Spain, even if you were to spend 7 months in the UAE and get a tax certificate there, you would still be considered a Spanish tax resident for 4 tax periods (Im guessing a tax period is a year). But since you left Spain a long time ago, and are moving out from Canada, not Spain, this shouldn't be a problem.

Still, with 4 months in Spain and a house there, there is a risk Spanish authorities deem you have your center of activities in Spain. You are probably ok, but still. To be on the safe side here, I would cut those 4 months down to like 2. And consider selling the house in Spain as well - having property in a tax hell with a very aggressive tax agency gives them a point of attack, Im not sure it's worth the risk.

 

[banafinfodafuggiano]

See here:

https://www.oecd.org/tax/automatic-exchange/crs-implementation-and-assistance/tax-residency/Spain-Tax-Residency.pdf

It says "Individuals of Spanish nationality who accredit their new fiscal residence in a country or territory labelled as a tax haven will not lose their status as taxpayers for Individual Income Tax. This rule is of application during the tax period in which the change of residence occurs and for the next four tax periods."

So if you were moving out from Spain, even if you were to spend 7 months in the UAE and get a tax certificate there, you would still be considered a Spanish tax resident for 4 tax periods (Im guessing a tax period is a year). But since you left Spain a long time ago, and are moving out from Canada, not Spain, this shouldn't be a problem.

Still, with 4 months in Spain and a house there, there is a risk Spanish authorities deem you have your center of activities in Spain. You are probably ok, but still. To be on the safe side here, I would cut those 4 months down to like 2. And consider selling the house in Spain as well - having property in a tax hell with a very aggressive tax agency gives them a point of attack, Im not sure it's worth the risk.

I'm not a Spanish tax resident since 2013. I am a Canadian Tax Resident, I presume they won't make me a Spanish Tax resident just because I spend 3-4 months a year in Spain in this case?

The whole point of getting a mortgage in Spain is so I can live there for some time and not pay rent, and unfortunately there are only a few handful of places that allow non-residents to get mortgages. One of them is Spain, the UAE and Portugal, that's about it. I'm not a resident of Spain so I'd have to get a non-resident mortgage both in UAE and Spain in my case.

 

[JohnLocke]

When I read your setup and compare it with many of the comments I read in this thread and in a multitude of other threads here on the forum, I really don't think you'll be able to avoid the Spanish tax authorities as long as you own property there.

But it might be worth it for you to maybe find a tax lawyer in Spain and ask for his advice to get a better basis for making a decision about what you should do.

 

[JackAlabama]

I'm not a Spanish tax resident since 2013. I am a Canadian Tax Resident, I presume they won't make me a Spanish Tax resident just because I spend 3-4 months a year in Spain in this case?

The whole point of getting a mortgage in Spain is so I can live there for some time and not pay rent, and unfortunately there are only a few handful of places that allow non-residents to get mortgages. One of them is Spain, the UAE and Portugal, that's about it. I'm not a resident of Spain so I'd have to get a non-resident mortgage both in UAE and Spain in my case.

The ties you will have to spain: youre a citizen plus own property and you live there far longer than any normal holiday and even want to have a mortgage.

 

[aragon]

But it might be worth it for you to maybe find a tax lawyer in Spain and ask for his advice to get a better basis for making a decision about what you should do.

This.

Your setup is complicated, and also is at risk of failing if your circumstances change slightly over time. Maybe you have to stay in Spain for longer than usual one year. Or maybe you don't rent it on airbnb for a while, which would mean it's a home for you even if you're not there. I can't understand why you would want to own property and have a mortgage in a country you don't reside. Your setup would be safer if you sold your Spanish property, and whenever you want to stay in Spain, rent from someone else.

 

[banafinfodafuggiano]

This.

Your setup is complicated, and also is at risk of failing if your circumstances change slightly over time. Maybe you have to stay in Spain for longer than usual one year. Or maybe you don't rent it on airbnb for a while, which would mean it's a home for you even if you're not there. I can't understand why you would want to own property and have a mortgage in a country you don't reside. Your setup would be safer if you sold your Spanish property, and whenever you want to stay in Spain, rent from someone else.

I just want a home to live in, and houses in Dubai are extremely expensive ($1m USD and above for a decent Villa).
While in most of Southern and Eastern Europe houses can go as low as $250K (brand new including land).

I was looking into Spain and Italy since these are warm welcoming countries with good property laws.
Has anyone purchased in Italy and can advice? I read that their fiscal regime is simply 183 days a year inside the country and you are a Tax resident.

Also Ukraine and Romania do not look too bad and are very cheap... I wonder if property laws are still followed in these places or it's the wild west considering what's happening with Russia right now...

 

[Meta]

I'm not a Spanish tax resident since 2013. I am a Canadian Tax Resident, I presume they won't make me a Spanish Tax resident just because I spend 3-4 months a year in Spain in this case?

The whole point of getting a mortgage in Spain is so I can live there for some time and not pay rent, and unfortunately there are only a few handful of places that allow non-residents to get mortgages. One of them is Spain, the UAE and Portugal, that's about it. I'm not a resident of Spain so I'd have to get a non-resident mortgage both in UAE and Spain in my case.

Have you filed anything with Spanish tax authorities since 2013? There is tax on rental income from Airbnb and the rates may be different depending on your residence status. (Also you need a license for Airbnb I think)

I have heard a piece of advice I think is valuable. You should file such an income and tick the "non-resident" checkbox. The tax authority would find out sooner or later anyway (you are registered in property registry, receiving Airbnb payments etc) and send you a notice presuming you are a resident. Then you're in a non-pleasant process of proving you are not. But if you send non-resident declarations they will likely accept it.

Also I was consulting Spanish lawyers regarding a similar matter (they are mostly not very good to be honest). I was told that in case of doubt tax authorities would ask one to produce tax residency certificate from another state. I don't see much reasons for that if one doesn't meet Spanish tax residency criteria, but apparently this is what they do. Since you are a tax resident of Canada you should be fine, albeit it would cause some inconvenience.