The Expat Honesty Trap
#16
Lost in BE Cyberspace
Joined: Apr 2009
Posts: 7,749
Re: The Expat Honesty Trap
I still marvel at the breathtaking scale of IVA avoidance.
At the builders merchants.
"I am sorry, I will have to charge you IVA on the concrete Vigas because I had to pay IVA on them, everything else comes without IVA."
So how does that work then? The cement factory doesn't pay IVA or just to big enterprise i.e. big orders? same with bricks, sand, tiles...... No one in government spots a huge undertaking employing hundreds yet paying no IVA each quarter.
At the builders merchants.
"I am sorry, I will have to charge you IVA on the concrete Vigas because I had to pay IVA on them, everything else comes without IVA."
So how does that work then? The cement factory doesn't pay IVA or just to big enterprise i.e. big orders? same with bricks, sand, tiles...... No one in government spots a huge undertaking employing hundreds yet paying no IVA each quarter.
Offically they earn say 1,500 euros per month, but get an extra 300 cash in hand
This facilitates business when margins are very tight but actually there is very little to be gained by people who earn less than 20-25k per year. They would be better off declaring all income as the tax rebates are pretty generous especialy if you have children
#17
BE Forum Addict
Thread Starter
Joined: Dec 2009
Location: Aracena area Huelva Spain
Posts: 1,631
Re: The Expat Honesty Trap
They fiddle the numbers. Officially the factory produces 2000 blocks per week, but they actually produce 3,000. 2,000 go on the books and they pay IVA, 1000 get sold on the black market. This happens with so many things and even with people's salaries.
Offically they earn say 1,500 euros per month, but get an extra 300 cash in hand
This facilitates business when margins are very tight but actually there is very little to be gained by people who earn less than 20-25k per year. They would be better off declaring all income as the tax rebates are pretty generous especialy if you have children
Offically they earn say 1,500 euros per month, but get an extra 300 cash in hand
This facilitates business when margins are very tight but actually there is very little to be gained by people who earn less than 20-25k per year. They would be better off declaring all income as the tax rebates are pretty generous especialy if you have children
#18
Banned
Joined: Feb 2011
Location: Mallorca
Posts: 19,367
Re: The Expat Honesty Trap
I agree wholeheartedly, but again I would argue that policy has become over-engineered to prevent prosperity, grossly favouring big politically-connected entities who employ 1000's of average people, who ultimately assume the lion's share of burden through high taxation, high VAT and other burdens.
That's our system. You're supposed to work for the Government, Seat, Telefonica, or Endesa all your life, and accept your meager pension at the end. What happens in-between isn't any of your business, any you shouldn't be so naive as to believe you can make it any other way. And if you do, well, you'd better keep it quiet...
That's our system. You're supposed to work for the Government, Seat, Telefonica, or Endesa all your life, and accept your meager pension at the end. What happens in-between isn't any of your business, any you shouldn't be so naive as to believe you can make it any other way. And if you do, well, you'd better keep it quiet...
#19
BE Forum Addict
Thread Starter
Joined: Dec 2009
Location: Aracena area Huelva Spain
Posts: 1,631
Re: The Expat Honesty Trap
interesting pertinent article :-http://www.theguardian.com/business/2014/aug/10/tax-benefits-citizens-income-self-employment
Did tell me that the tax free personal allowance in England is now significantly greater than it is here too.
Did tell me that the tax free personal allowance in England is now significantly greater than it is here too.
#20
Lost in BE Cyberspace
Joined: Feb 2008
Posts: 5,621
Re: The Expat Honesty Trap
Basic allowance in UK now £10,000
#21
Ex Expat
Joined: Oct 2006
Location: West Midlands, ex Granada province
Posts: 2,140
Re: The Expat Honesty Trap
This was the thing I found most difficult about living in Spain. I actually found it very stressful
The other expats (and some of the Spaniards) in our village thought we were mad for matriculating the car.
A friend of mine's house was found to be illegal (they bought it in good faith). They decided to appeal the decision as they had done nothing wrong and had been lied to by the notary. They found EVERYONE including other expats, were against them. One said, ' it's their own fault, they should not have argued'. In other words, pay the mayor and it will go no further . But they were innocent and wanted justice. Fat chance. It just cost them a load of money and their house is classed as illegal anyway.
It is an aspect of Spain I have never missed since we left.
The other expats (and some of the Spaniards) in our village thought we were mad for matriculating the car.
A friend of mine's house was found to be illegal (they bought it in good faith). They decided to appeal the decision as they had done nothing wrong and had been lied to by the notary. They found EVERYONE including other expats, were against them. One said, ' it's their own fault, they should not have argued'. In other words, pay the mayor and it will go no further . But they were innocent and wanted justice. Fat chance. It just cost them a load of money and their house is classed as illegal anyway.
It is an aspect of Spain I have never missed since we left.
Last edited by scampicat; Aug 12th 2014 at 3:42 am.
#22
Lost in BE Cyberspace
Joined: Apr 2009
Posts: 7,749
Re: The Expat Honesty Trap
People need to get real about what this world needs. It doesn't need more wonga.com employees or even more rocket scientists. It actually doesn't need millions working more than 40 hour weeks while other millions don't work at all. It needs a radical rethink and anyone who is making a valid contribution should earn a valid income and not have to support the greedy or the dishonest
It is a very difficult way to live life. You are trying to play tennis while everyone else is playing football But ideally in a just world then yes everyone could do what they like and get paid comfortably for it
#23
Lost in BE Cyberspace
Joined: May 2009
Location: Alicante province
Posts: 5,753
Re: The Expat Honesty Trap
We're about to sign up for a pirate TV service. The whole set up is kind of 'illegal' but it's by far the best and most efficient around - you couldn't get the same service legally, not for any amount of 'legal' money. The company is run by a local politician, an all Spanish set up.
My wife telephoned to ask what documents we required to sign the contract. A NIE number and the necessary cash, and the NIE number could be arranged if it wasn't to hand.
I've only commented on it because of this thread. It's all perfectly normal and ultra efficient.
My wife telephoned to ask what documents we required to sign the contract. A NIE number and the necessary cash, and the NIE number could be arranged if it wasn't to hand.
I've only commented on it because of this thread. It's all perfectly normal and ultra efficient.
#24
Yaaarp
Joined: Oct 2009
Location: Trying to get the hell outta Spain!
Posts: 1,354
Re: The Expat Honesty Trap
We're about to sign up for a pirate TV service. The whole set up is kind of 'illegal' but it's by far the best and most efficient around - you couldn't get the same service legally, not for any amount of 'legal' money. The company is run by a local politician, an all Spanish set up.
My wife telephoned to ask what documents we required to sign the contract. A NIE number and the necessary cash, and the NIE number could be arranged if it wasn't to hand.
I've only commented on it because of this thread. It's all perfectly normal and ultra efficient.
My wife telephoned to ask what documents we required to sign the contract. A NIE number and the necessary cash, and the NIE number could be arranged if it wasn't to hand.
I've only commented on it because of this thread. It's all perfectly normal and ultra efficient.