Setting up a company and starting with the activities to be developed will involve a prior process to ensure that the business is well registered and can operate smoothly within the country.
Respect this, it is interesting to know the differences between fiscal and social domiciliation, which may be somewhat similar concepts, but which refer to different areas and can often cause confusion.
What is the Domiciliation for tax purposes?
Domiciliation for tax purposes refers to the place where the taxpayer is located, regardless of whether he/she is a natural or legal person, in his/her relations with the administration.
In other words, the tax domicile of natural persons is their habitual residence.
When a natural person carries out economic activities, the tax administration will consider the place where the administrative management and direction of the activities carried out is centralised as the tax domicile.
What is social domiciliation?
The registered office or business address is the place where the centre of administration and management of a company is located and where the company is used for its operations.
This is exclusively for companies, so if you are self-employed you do not have to be registered as a partner.
This choice is essential for legal entities of a commercial nature, and is modified by means of a public deed, which must be registered in the Commercial Register and sent to the Tax Office.
All this implies that before setting up this domiciliation it is necessary to think carefully about the place where we want to locate it, because modifying it over time can be quite a complex process.
Differences between tax and social domiciliation
At first glance it may seem that the terms tax domiciliation and social domiciliation are the same, but in fact they have some differences.
It should be noted that these differences affect companies and firms, because, as mentioned above, the self-employed do not have to have a registered office.
The difference between the two is that the registered office is defined and regulated by the Companies Act, while the tax domicile is defined and regulated by the General Tax Act.
On the other hand, the registered office is the place where the business activity is carried out, and the tax domicile where the company receives notifications from the tax authorities.
At present, this aspect is not very relevant, because all notifications can be received at the electronic headquarters.
Finally, the registered office is a matter of public knowledge, but the tax domicile belongs to the private sphere of the entrepreneur, without the involvement of a notary.
It is normal for the registered office and tax domicile to coincide, and they must always be indicated at the tax office.
When starting a company and developing its functions, it is important to be clear about the differences between tax and company domiciliation so that all administrative processes are well complemented and comply with the country’s regulations.
