Guillermo Narvaez
Tax Partner at Kreston Mexico City Office, Kreston FLS

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Guillermo Narvaez is a Tax Partner at Kreston FLS Mexico City Office and the Technical Tax Director, Global Tax Group, Kreston Global and member of the International Fiscal Association (IFA). Guillermo is a tax expert on international taxation, corporate taxes, transfer pricing, mergers and acquisitions, corporate reorganisations and litigation.

Within international taxation, Guillermo specialises in the analysis and interpretation of treaties to avoid double taxation applied to international transactions.

Proof of residence: Acceptable evidence for a double tax agreement

December 18, 2023

A certificate issued by a competent tax authority confirming residence for tax purposes is broadly accepted as proof of residence of an individual. However, a recent ruling in the Spanish courts casts doubt on that.

Double tax agreement

One of the main uses of these certificates is when a person has a double residence and needs to define in which State should be considered a tax resident. To achieve this, double tax agreements (DTA) include a tiebreaker in their residence provision commonly identified in Article 4 of DTAs. But before going to the tiebreaker must be clear that the same individual is deemed a tax resident of two different States and evidently such States has in force a DTA.

Demonstrating residence

The tax administration of Spain disregarded a tax certificate issued by the US under the argument that “Americans can get one just for being US citizens”. Accordingly, the position of the authority was that the individual did not demonstrate his double tax residence in both countries, US and Spain, thus it was not necessary to apply the tiebreaker of the DTA given that the tax residence of that person was already defined.

Tribunal outcome

The highest tribunal of Spain (“Tribunal Supremo”) overturned the ruling of the tax authority to conclude that a domestic authority does not have the power to disregard the effects of a tax certificate issued for international taxation by another government if such certificate was prepared to be applied in a double tax agreement.

If you would like to talk to someone about double tax treaties and proof of residence, please get in touch.