Carmen is a retired schoolteacher, widowed, and for the past three years she has spent most of the year in Bologna, where her daughter lives with the grandchildren. She is still registered on the padrón (the local population register) at her flat in Albacete because, as she was told, "if you come off the padrón you lose your health card". On her income tax return she still appears as resident in Spain, although she has begun to wonder whether she should be filing in Italy. What holds her back is the fear of being left without a doctor. And, without knowing it, she is mixing up three questions that are governed by different rules, depend on different administrations and do not decide one another.
Three concepts people use as if they were one
| Concept | What it proves | Who decides it | Under which rules |
|---|---|---|---|
| Tax residence | In which country you are taxed on your worldwide income | The tax administration | The IRPF act and the treaty |
| Public healthcare cover | Which health system you are entitled to | Social Security and the health system | Health and Social Security rules |
| Padrón registration | Where you usually live, for municipal purposes | The town hall | Local government rules |
None of the three follows automatically from the others. You can be registered on the padrón in Albacete and be tax resident in Italy. You can be tax resident in Spain and not be registered where you live. And a pensioner's right to healthcare depends on their status as a pensioner and on where they reside for Social Security purposes, not on which country they file their income tax return in.
Tax residence is not chosen: it is established
The first thing to make clear to Carmen is that tax residence is not an option you tick on a form. Spanish law determines it from the facts. Under article 9 of the Spanish personal income tax act (IRPF), you are resident if you spend more than 183 days in Spain in the calendar year, if the main centre or base of your economic interests is here, or (as a presumption that can be rebutted) if your spouse, not legally separated, and your dependent minor children live here.
There is also a rule that surprises many travelling pensioners: when counting days, sporadic absences are included unless you prove your tax residence in another country. Let us do the sum with Carmen's actual calendar last year:
- January and February in Albacete: 59 days.
- Easter in Albacete: 12 days.
- July and August in Albacete: 62 days.
- Christmas in Albacete: 20 days.
- Days in Spain: 59 + 12 + 62 + 20 = 153 days.
With 153 days, Carmen does not pass the threshold for physical presence. But that is not enough: if her pension is paid into a Spanish bank, her only property is in Albacete and she has no income or assets in Italy, the Agencia Tributaria (the Spanish tax agency) may argue that the centre of her economic interests is still in Spain. And if she has no Italian tax residence certificate, the weeks she spends in Bologna may be disputed as sporadic absences. The outcome is not obvious, and that is precisely the problem.
Although padrón registration does not decide tax residence, the Agencia Tributaria uses it as an indication. Declaring that you are not resident in Spain while you remain registered here, with a health card from here and a family doctor here, is handing Hacienda (the Spanish tax authorities) evidence to the contrary. If you change your tax residence, the other papers should tell the same story.
What happens to healthcare when a pensioner moves away
This is the part where caution is advisable, because it is not a tax matter and each case has its own rules. What we can say from the Spanish side is the general approach, not the result in each case:
- The right to healthcare of a Spanish Social Security pensioner arises from their status as a pensioner, and it is recognised by the national Social Security institute (INSS), not by the tax authorities.
- Within the European Union there are regulations coordinating Social Security systems. As a general rule, a pensioner who receives only a Spanish pension and moves their residence to another Member State may be covered in the country where they live at Spain's expense, through the document issued by Spanish Social Security. Whether that is your case, and on what conditions, is confirmed by the INSS.
- Outside the European Union, it depends on bilateral Social Security agreements and on the law of the destination country. How healthcare works in that country is not something we can answer.
What we can state is that there is no tax rule saying that you lose healthcare when you stop being tax resident, and no healthcare rule that depends on where you file your income tax return. They are two separate files. Mixing them up leads to tax decisions taken out of fear about healthcare, or the other way round.
The cost of staying halfway
Carmen has a clases pasivas (civil service) pension of 26,000 €. If she is tax resident in Spain, she is taxed here on that pension and on everything else, under IRPF. If she were tax resident in Italy, her civil service pension would foreseeably still be taxed in Spain (treaties usually reserve public pensions to the paying State, unless the person is a national of the other country), but under non-resident income tax (IRNR) and with a different scale. And the Italian side of her tax life would be dealt with by her adviser in Italy.
What Carmen cannot do is declare herself non-resident in Spain while behaving as a resident in every other respect. If the Agencia Tributaria reviews the case, it has four years to do so, and with the padrón, a health card, accounts and a home in Albacete, the argument starts uphill. The nuance of public pensions is covered in I am a retired civil servant living abroad.
Putting the three questions in order
The sensible order is the reverse of the one almost everyone follows:
- Decide, based on the facts, where you are really going to live, for how many days and with what centre of interests.
- Determine tax residence from those facts, and prove it with the certificate from the relevant country.
- Sort out healthcare cover with the INSS and, where appropriate, with the destination country's system.
- Bring the padrón into line with reality, so that it does not contradict the rest.
If the result of the first step is that you still live more in Spain than abroad, you will most likely remain tax resident here and there will be nothing to change. If it is the opposite, the other three steps must go with it. If you want us to review your calendar and your ties before you change anything, the pensioners form collects the days, pensions and assets needed to assess it.
When two countries consider you resident
It may happen that Spain and Italy both consider Carmen resident at the same time, each under its own rules. For this the treaty has tie-breaker criteria: permanent home, centre of vital interests, habitual abode and nationality, in that order. They are not the same criteria as those of the padrón or of healthcare, and they should be documented. They are explained in dual residence conflict, and proving residence to the pension payer in the certificate your payer needs.
Questions about the tax residence of people who divide the year between two countries are among the usual enquiries handled by Salama Tax in its pensioners line, always separating what belongs to the tax authorities from what belongs to Social Security or the town hall.