The Capital Companies Act establishes that the registered office is the place where the activity is carried out and appears publicly in the Mercantile Register. The General Tax Act, on the other hand, indicates that the tax domicile is the place of reference for relations with the Tax Authorities and is not public knowledge. The Tax Agency (as well as the Social Security) must be aware of both in order to provide the company with a Tax Identification Number.
Differences between registered office and tax domicile
Only companies have a registered office. When a commercial company is incorporated, a registered office is established in the deed executed before a notary. Once registered in the Mercantile Register, the registered office will be public, so that any interested party can locate the company.
The Capital Companies Act establishes that capital companies shall fix their registered office within Spanish territory at the place where the centre of their effective administration and management is located, or where their main establishment or operation is located.
Capital companies whose principal place of business or operation is within Spanish territory must have their domicile in Spain.
The location of the registered office is important for many purposes: it determines the Mercantile Register where the company must be registered; the competent courts for legal matters; the tax office and the applicable local or regional regulations.
The tax domicile, on the other hand, is that which is determined in order to receive notifications from the Administration. This address, contrary to what we said with regard to the registered address, is not recorded in a public deed. If you wish to change your tax address, this is done by filling in form 036 of census communication.
Tax regulations require taxpayers to notify the tax authorities of their tax domicile and any changes that may occur to it.
Generally, the taxpayer’s tax domicile provides information on the tax residence and, therefore, the applicable tax system; the tax office to which the taxpayer is assigned; the place where notifications can be made and the specific physical location declared and binding for the taxpayer for the purposes of administrative procedures and tax control.
The General Tax Law defines the tax domicile as the place where the taxpayer is located in his relations with the tax administration and then specifies the rules for determining it. The tax domicile for tax purposes will be:
- For natural persons or individuals, that of their habitual residence; and specifies that if the natural person or individual carries out mainly economic activities, the tax administration may consider as tax domicile the place where the administrative management and direction of the activities carried out is effectively centralised.
- The tax domicile of legal persons and entities resident in Spanish territory will be that of their registered office, provided that the administrative management and management of their business is effectively centralised there. Otherwise, the place where such management or administration is carried out shall be taken into account. In cases where the place of domicile for tax purposes cannot be established in accordance with the above criteria, the place where the greatest value of the fixed assets is located shall prevail.
Legal persons or entities not resident in Spanish territory will have their tax domicile in Spain when:
- They operate in Spain through a permanent establishment, in a place where the effective administrative management and management of their business in Spain is located. In the event that the place of tax domicile cannot be established in accordance with the above criterion, the place where the greatest value of the fixed assets is located will prevail.
- If they obtain income from immovable property, in the tax domicile of the representative and, failing that, the place where the property of the corresponding person is located.
- In other cases, at the tax domicile of the representative or, failing that, at the domicile of the person jointly and severally liable.
Non-resident entities without a permanent establishment which are not required under the regulations of each taxation system to declare their tax domicile or which act through a representative in Spain must declare their tax domicile abroad.
In addition to the tax domicile, the tax regulations require taxpayers who carry out economic activities to declare the following additional location data:
- The place where they have effectively centralised the administrative management and direction of their business in Spanish territory, when different from the tax domicile, for resident natural persons, entrepreneurs and professionals.
- The registered office, if it exists and is different from the tax domicile for legal persons or entities resident in Spanish territory.