One of the trickiest — and most doubt-ridden — moments in relocating to Spain is the very year the change of tax residence takes place. For part of that year, a person may technically still have been a non-resident, yet have had withholding tax or payments on account applied under ordinary Spanish personal income tax rules before the change of tax residence was formally established. The question that comes up again and again is simple: is that withholding tax lost, or can it somehow be used when filing as a non-resident for that period?
What the Directorate-General for Taxation clarifies
According to AEAFyT’s weekly tax bulletin, binding ruling V5233-26, of 22 July 2026, from Spain’s Directorate-General for Taxation (DGT) confirms that withholding tax, payments on account and advance payments made under personal income tax rules before the change of tax residence is established can be treated as payments on account of Non-Resident Income Tax (IRNR) and credited against the IRNR liability — provided the income in question is genuinely subject to that tax. In other words: amounts withheld “in excess” under resident rules are not lost; they are simply redirected to the tax that actually applied.
What this means for you
This is especially relevant for the kind of client we work with most often at EBF: people who move to Spain — or leave it — partway through the year, and who receive income subject to withholding under a regime that, in hindsight, was not the correct one from a tax standpoint. Without this clarification, there was a real risk of economic double taxation: overpaying during the transition period with no way to recover it afterwards. With this criterion, those amounts can be properly credited against IRNR, avoiding that extra cost.
That said, applying it correctly requires careful documentation: pinning down precisely the date on which the change of tax residence is established, identifying which income belongs to which period and which tax it is actually subject to, and keeping the withholding certificates. Any gap in that paper trail can complicate the application of an otherwise favourable rule.
Something worth planning for in advance
Changes of tax residence should almost never be handled only at the point of filing the return: how the process is documented during the year of the move itself — contracts, dates, withholding certificates — is what later allows a criterion like this to be applied correctly.
At EBF Consulting we support British and international clients through their changes of tax residence, both into and out of Spain, making sure no withholding tax applied during the transition goes unused. If you are in the middle of a move, or planning one for the coming months, let’s talk before the tax year closes.
Official reference: Directorate-General for Taxation, binding ruling V5233-26, of 22 July 2026 (reported in AEAFyT’s weekly tax bulletin, week of 7–11 September 2026).