Mateo Gil is Uruguayan, has lived in Barcelona since 2023 and is tax resident in Spain. Before moving he set up a single-member LLC in Wyoming to invoice his product consultancy services to clients in several countries. The LLC has an account with a US digital bank, has no employees or office, and every decision is taken by Mateo from his flat in the Eixample. In 2025 the LLC invoiced 120,000 USD and had 20,000 USD of expenses. Mateo has declared nothing in Spain because he was told the LLC "does not pay tax" and that money he does not take out of the account is not his for tax purposes. Both statements mix up the law of two countries and neither answers the question that matters: how Spain views that income.
What the United States says does not decide everything
In the US system, a single-member LLC may be treated, depending on its status there, as an entity with no separate tax identity or as a corporation. Which applies to Mateo's LLC, what it must file there and with what consequences is a question of US law that his adviser in the United States confirms. We do not give an opinion on it.
What is our business is to explain that Spanish law does not simply copy that classification. Spain has its own rules for deciding whether a foreign entity is a separate taxpayer or a vehicle whose income is attributed to its members, and others for deciding where a company is resident.
Three possible readings from Spain
First: an entity under the income attribution regime. Article 87.1 of Law 35/2006 on IRPF, Spanish personal income tax, includes among entities under the income attribution regime "entities set up abroad whose legal nature is identical or similar" to that of attribution entities set up under Spanish law. If the LLC is regarded in that way, its income is attributed to Mateo every year, whether or not it is distributed, and it keeps its nature: earnings from a business activity.
Second: a company resident in Spain. If the LLC is regarded as an entity with its own legal personality, article 8.1 of Law 27/2014 on Corporation Tax treats it as resident in Spain if it has its place of effective management here, which exists "when the management and control of all its activities are located there". An LLC with no structure in the United States, whose sole manager takes every decision from Barcelona, is fully exposed to this rule. The consequence would be paying Spanish Corporation Tax, with all its obligations, and Mateo also being taxed on whatever the company distributes to him.
Third: a non-resident company under international tax transparency. If it were treated as a non-resident company, article 91 of the IRPF Law requires the member to include its income in their own return when they control at least 50 % and the tax paid by the entity is less than 75 % of what would have been due in Spain. If the entity does not have the organisation of material and human resources needed to earn its income, all of its income is included. We explain this in the guide to international tax transparency.
| Classification | Who is taxed in Spain | On what income | Legal basis |
|---|---|---|---|
| Income attribution entity | Mateo, every year | Business earnings, whether or not distributed | Art. 87 of the IRPF Law |
| Resident company because of its place of management | The LLC in Corporation Tax, and Mateo on what he receives | The company's profit and dividends | Art. 8.1 of the Corporation Tax Law |
| Non-resident company under transparency rules | Mateo, through inclusion | The entity's income included in his return | Art. 91 of the IRPF Law |
The three readings are not interchangeable at the taxpayer's choice: they depend on facts (who decides, where, with what resources) and on how the particular LLC compares with the Spanish legal forms. That is why two apparently identical LLCs may be treated differently. In none of the three is the answer "nothing". The idea that money left in the LLC's account is not taxed in Spain does not fit any of them.
Mateo's figures under the first reading
For illustration we take an exchange rate of 1 € = 1.10 USD for the whole year; in practice each transaction is converted at its own date.
- LLC income: 120,000 USD ÷ 1.10 = 109,090.91 €.
- Expenses: 20,000 USD ÷ 1.10 = 18,181.82 €.
- Net earnings attributed to Mateo: 90,909.09 €.
- That amount goes into his general taxable base for 2025, with the progressive state scale and that of Catalonia.
- If the LLC or Mateo paid any tax in the United States on that income, the double taxation deduction in article 80 is analysed, with its cap; we cover it in tax has been withheld abroad.
Other questions are added to this: if Mateo, from Spain, is the person who actually provides the services, his obligation to register as an autónomo (self-employed) has to be examined, as do how the VAT on those services is handled and who the business is for that purpose. And the LLC's accounts outside Spain may fall within Modelo 720, the return on assets held abroad, if Mateo is holder, authorised signatory or beneficial owner.
If Hacienda, as the Spanish tax office is commonly known, concludes that the LLC is managed from Spain, it may claim Corporation Tax for several years from the entity itself, as well as IRPF from its member on what he has received, with interest and possible penalties. If it concludes that the LLC is transparent, the income is attributed to Mateo year by year. There is no way of guaranteeing which classification will prevail; what can be done is to put the documents in order and assess each scenario before a request for information arrives.
Where to start putting it in order
To decide which reading is strongest, the LLC's documents are needed: the certificate of formation, the operating agreement, the returns or forms filed in the United States, the bank statements and the list of clients. The history matters too: where Mateo lived when he set it up, whether anyone else takes part in management and what resources the entity has outside Spain.
With that information it is possible to compare the cost of each scenario, assess whether it makes sense to regularise past years and decide the future of the structure: keep it, transform it or replace it with registration as a self-employed person or with a Spanish company. If several years have to be regularised, the order matters; we explain it in regularising several years at once. You can send us the documents through the form for self-employed people with international clients.
If you are a US citizen, on top of all this come the obligations the United States imposes on its nationals wherever they live; we deal with them in I am American and live in Spain and on the page about Americans with an LLC in Spain.
The taxation of people who work from Spain through structures set up abroad, together with the other obligations of a self-employed person with international clients, is explained on the Salama Tax page devoted to that line.