Globe-Trotting Sportsman Or Entertainer: Spain

A Spanish citizen with extensive, international, multi-sourced income is not in a good tax situation unless he or she can establish non-residence, since full, world-wide taxation of income and capital gains will apply.

If resident in Spain, the peripatetic professional may well find himself paying withholding tax in a number of countries which cannot in some cases be reclaimed or set off against Spanish taxation because of the absence of a tax treaty.

Such an individual will almost certainly resort to corporate structures to market his or her skills and manage derivative income flows. It may well be that these can usefully be based in offshore jurisdictions, although complex structures may be necessary if corporate anti-avoidance rules are to be avoided. The Canary Islands also offer some possibilities.

Apart from the extra difficulty of minimising tax on the income side, a Spanish-resident sportsman or entertainer will be in the same position as any other Spanish resident. (Select 'High-Tax Country Resident' and 'Spain' for a fuller description).

Non-Spanish tax residence has to be proven by means of a certificate issued by the competent tax authority in the country in question. An individual may have a residence permit or administrative residence in a country and yet not be deemed to have tax residence there. Spanish tax treaties normally include 'tie-breaker' wording to resolve possible cases of dual tax-residence.

Individuals of Spanish nationality who change their country of residence to a designated tax haven (there are 48 of them) continue to be liable for Personal Income Tax (IRPF) in Spain for the tax period in which the change of residence occurs and the following four tax periods.

If a foreign sportsman or entertainer becomes Spanish resident, then he or she is in the same position as an expatriate executive (select 'Expatriate Executive' and 'Spain').

Such individuals who have significant business income may be able to make use of offshore corporate tax shelters in order to minimise Spanish taxation.

www.lowtax.net contains details of the offshore business sectors of 50 jurisdictions, and their taxation.

NB: The suggestions given above do not constitute investment advice. They are intended only to assist individuals in finding appropriate professional advice, which is essential for anyone planning offshore investment.