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Paying tax in Spain and a fascinating Spanish VAT question

Paying tax in Spain and a fascinating Spanish VAT question

Old Oct 20th 2019, 3:57 pm
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Default Paying tax in Spain and a fascinating Spanish VAT question

Hi all,

OK, not really fascinating, that was my lure ;-)

My wife and I are considering moving to Spain, buying a house and living there for most of the year. She is self-employed and her earnings are roughly £25k. I am living off my savings.

Basically, here's what I've pieced together about tax so far. Tell me where I'm wrong!

1) As we will be living in Spain +183 days a year, we will be Tax resident there.
2) My wife will need to become Autonomo to continue her self-employment.
The taxes she will need to pay are:
a) Social security : A flat amount that rises from about 50 euros a month to about 280E a month after the first 3 years.
b) IRPF income tax: The first 5550 euros are tax free, and then after that she will need to pay 19% on the first 12450EUR and 24% above that. There are probably a few more allowances she could get (not got that far yet..)
c) VAT/IVR: Here's my "fascinating" question - My wife currently invoices a UK company and would continue to do so. She works in linguistic translation services, and we're currently looking at living in the Canaries. How much IVR does she need to pay? I've seen something about inter-communitary transactions perhaps meaning she wouldn't need to worry about this, but really not sure.

(overall btw, IVR or no IVR, ouch - Spanish taxes are harsh.)

4) In my case I have savings, but not enough to be troubled by the wealth tax. However, it looks like I'd have to pay 20% tax roughly on savings interest above about 5550 euros - is that right?

5) I'm also aware that there's a married couples allowance, but since we'd both be using all of our allowances for work/savings tax, would this not be worthwhile?

6) Finally, someone told me my healthcare would be covered by my wife's social security contributions - is that correct? And as a non-worker living in Spain what else do I have to pay, if anything?

Frankly what with Brexit and all of the above, not sure we can afford to do this at the moment!
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Old Oct 20th 2019, 5:01 pm
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Default Re: Paying tax in Spain and a fascinating Spanish VAT question

c) VAT/IVR: Here's my "fascinating" question - My wife currently invoices a UK company and would continue to do so. She works in linguistic translation services, and we're currently looking at living in the Canaries. How much IVR does she need to pay? I've seen something about inter-communitary transactions perhaps meaning she wouldn't need to worry about this, but really not sure.

As far as I know any operation of this nature requires registration as an "InterCommunity Operator " (RIO ) - having first registered for VAT ( IVA ) . There is a particular form - 036 that needs to be submitted to the Spanish Tax . authorities. Once submitted your wife would receive a NIF-IVA . At the same time the client needs to appear on the same register and you can find this out by consulting the EU or tax authorities register. - VIES system. If both your wife and the client appear in the system effectively she can invoice IVA -free - at least while UK still in the EU.
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Old Oct 20th 2019, 5:27 pm
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Default Re: Paying tax in Spain and a fascinating Spanish VAT question

You are forgetting the €2000 general allowance that everyone gets on top of the basic €5500 allowance.

You will be taxed on any income from your savings as well.
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Old Oct 20th 2019, 5:49 pm
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Default Re: Paying tax in Spain and a fascinating Spanish VAT question

Originally Posted by Fred James View Post
You are forgetting the €2000 general allowance that everyone gets on top of the basic €5500 allowance.

You will be taxed on any income from your savings as well.
Thanks for the reply! Yes, I had seem reference to the 2k, but totally forgot about it. If it applies to everyone, not sure why they bother putting it separately? Anyway, every little helps!

So if we then submit our tax as a couple, would we get 5500 euro plus 3400 (is it?) plus 2000 x2 or just x1? Perhaps submitting as a couple might make sense after all.

Re: savings, yes I need to look into this further. if I submit my tax individually and have no other income, would i be able to earn 7500 (5500+2000) interest income tax free?
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