Go Back  British Expats > Living & Moving Abroad > Europe > Spain
Reload this Page >

Self employed uk resident working in spain

Self employed uk resident working in spain

Old Feb 19th 2011, 7:50 am
  #1  
Twb
Thread Starter
 
Joined: Feb 2011
Location: Exeter
Posts: 6
twbag is an unknown quantity at this point
Question Self employed uk resident working in spain

Hello.
I started working in spain 10 years ago with uk self employed resident status. i also have some work in uk and belgium. I have tried to keep my tax residence in the uk according to the double taxation treaty, and spend on average 90 days per year in the uk. I have a fixed abode in the uk and a rental in madrid. My uk clients pay into uk bank and spanish clients into spanish account. Every year the UK IR sends me the required tax residency certificate after i do my return. Everything has been going fine, until one of my spanish accounts, cajamadrid, was frozen, saying i have to present the non residents cert. They said my cert from uk, and written in accordance to the treaty, isnt good enough. They said i have to get a spanish one, however my other banks do this for me for a small fee. They also said i should have a NIE. I dont have a NIE and dont want one. I have closed the bank account in question.

My question is, am i doing right or has something changed?

I always thought the NIE isnt absolutely compulsary, unless one wants to be resident in spain, and just allows the spanish to track you more easily. (got nothing to hide)

I would appreciate your reassurance and guidance.

Many thanx.

Twb
twbag is offline  
Old Feb 19th 2011, 8:10 am
  #2  
Lost in BE Cyberspace
 
EsuriJohn's Avatar
 
Joined: Jun 2005
Location: Puente Esuri
Posts: 6,903
EsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond repute
Smile Re: Self employed uk resident working in spain

Originally Posted by twbag
Hello.
I started working in spain 10 years ago with uk self employed resident status. i also have some work in uk and belgium. I have tried to keep my tax residence in the uk according to the double taxation treaty, and spend on average 90 days per year in the uk. I have a fixed abode in the uk and a rental in madrid. My uk clients pay into uk bank and spanish clients into spanish account. Every year the UK IR sends me the required tax residency certificate after i do my return. Everything has been going fine, until one of my spanish accounts, cajamadrid, was frozen, saying i have to present the non residents cert. They said my cert from uk, and written in accordance to the treaty, isnt good enough. They said i have to get a spanish one, however my other banks do this for me for a small fee. They also said i should have a NIE. I dont have a NIE and dont want one. I have closed the bank account in question.

My question is, am i doing right or has something changed?

I always thought the NIE isnt absolutely compulsary, unless one wants to be resident in spain, and just allows the spanish to track you more easily. (got nothing to hide)

I would appreciate your reassurance and guidance.

Many thanx.

Twb
You should have a NIE to sign a long term rental contact also required for other things that you may do. You can get your own Non -Resident cert costs a lot less than the banks charge. Just go along to the nearest National Police Station.
EsuriJohn is offline  
Old Feb 19th 2011, 8:28 am
  #3  
Twb
Thread Starter
 
Joined: Feb 2011
Location: Exeter
Posts: 6
twbag is an unknown quantity at this point
Question Re: Self employed uk resident working in spain

Hello. thanks for quick reply on Saturday...

Yes. thanks. But the question is, Is it compulsory and can I just continue as I am?

I would prefer not to have to register for NIE or get this CERT. Don't mind if bank will do it. 15eur/2years isnt too bad. It would cost me more if I have to lose time... Havent had any probs renting privately or with anything, they just require a large deposit and bank guarantee


Happy wk/end
twbag is offline  
Old Feb 19th 2011, 9:45 am
  #4  
 
Fred James's Avatar
 
Joined: Jun 2006
Location: Granada Costa
Posts: 10,898
Fred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond repute
Default Re: Self employed uk resident working in spain

The key question that needs to be answered is how much time do you spend in Spain?

If you spend more than 90 days consecutively in Spain you must register on the foreigners register and that will give you an NIE whether you want one or not. This does not affect your tax residency.

If you spend more than 183 days in Spain (not necessarily consecutively) in one calendar year you will deemed to be tax resident in Spain. The fact that you are tax resident in the UK under their 90 day rule does not affect this - it is possible to be tax resident in both countries but Spain will have the primary claim if you are tax resident in Spain.
Fred James is offline  
Old Feb 19th 2011, 10:57 am
  #5  
BE Forum Addict
 
Rotor's Avatar
 
Joined: Apr 2008
Posts: 3,171
Rotor has a reputation beyond reputeRotor has a reputation beyond reputeRotor has a reputation beyond reputeRotor has a reputation beyond reputeRotor has a reputation beyond reputeRotor has a reputation beyond reputeRotor has a reputation beyond reputeRotor has a reputation beyond reputeRotor has a reputation beyond reputeRotor has a reputation beyond reputeRotor has a reputation beyond repute
Default Re: Self employed uk resident working in spain

Originally Posted by twbag
Hello. thanks for quick reply on Saturday...

Yes. thanks. But the question is, Is it compulsory and can I just continue as I am?

I would prefer not to have to register for NIE or get this CERT. Don't mind if bank will do it. 15eur/2years isnt too bad. It would cost me more if I have to lose time... Havent had any probs renting privately or with anything, they just require a large deposit and bank guarantee


Happy wk/end
What I can say based on experience is do everything you can NOT to be issued with a NIE and carry on the same , once your in the Spanish system with a NIE you will never get rid of it and will always be on there files .
Get a euro account with a UK bank and get your clients to make payment to that account.Be the grey man
Rotor is offline  
Old Feb 19th 2011, 11:07 am
  #6  
squeaky clean
 
jojojojojo's Avatar
 
Joined: Mar 2010
Location: Spain 4th feb 08 - October 11, now flits batck and forth from sunny Worthing
Posts: 1,576
jojojojojo has a reputation beyond reputejojojojojo has a reputation beyond reputejojojojojo has a reputation beyond reputejojojojojo has a reputation beyond reputejojojojojo has a reputation beyond reputejojojojojo has a reputation beyond reputejojojojojo has a reputation beyond reputejojojojojo has a reputation beyond reputejojojojojo has a reputation beyond reputejojojojojo has a reputation beyond reputejojojojojo has a reputation beyond repute
Default Re: Self employed uk resident working in spain

I've just been with a friend to get her NIE number, altho she didnt want a residencia (she doesnt live permenantly in Spain). So she has been issued with an NIE number and no residency and told that it is only valid for 3 months

Jo xxx
jojojojojo is offline  
Old Feb 19th 2011, 12:37 pm
  #7  
Twb
Thread Starter
 
Joined: Feb 2011
Location: Exeter
Posts: 6
twbag is an unknown quantity at this point
Question Re: Self employed uk resident working in spain

Yes. Great advice. Except, I thought that under the double taxation treaty, I am only liable for tax in the country I select. For example: If Im in spain for more than 183 days and yet in Uk for 90, I can pay in the UK or Spain, but not both. Especially if I can show that I pass the fiscal residence test (resident in UK, habitual permanent domicile) and have the certificate from the UK authorities showing this. Is that right?

thanx
twbag is offline  
Old Feb 19th 2011, 12:43 pm
  #8  
Twb
Thread Starter
 
Joined: Feb 2011
Location: Exeter
Posts: 6
twbag is an unknown quantity at this point
Lightbulb Re: Self employed uk resident working in spain

here's a copy, attached, of the fiscal residence test. taken from The IR web page. According to it, I'm deemed resident in the UK and therefore I deduce that I must pay tax there, unless I want to be a dual resident.
twbag is offline  
Old Feb 19th 2011, 12:53 pm
  #9  
Started off with nothing
 
missile's Avatar
 
Joined: Feb 2009
Posts: 4,944
missile has a reputation beyond reputemissile has a reputation beyond reputemissile has a reputation beyond reputemissile has a reputation beyond reputemissile has a reputation beyond reputemissile has a reputation beyond reputemissile has a reputation beyond reputemissile has a reputation beyond reputemissile has a reputation beyond reputemissile has a reputation beyond reputemissile has a reputation beyond repute
Default Re: Self employed uk resident working in spain

Originally Posted by twbag
Yes. Great advice. Except, I thought that under the double taxation treaty, I am only liable for tax in the country I select. For example: If Im in spain for more than 183 days and yet in Uk for 90, I can pay in the UK or Spain, but not both. Especially if I can show that I pass the fiscal residence test (resident in UK, habitual permanent domicile) and have the certificate from the UK authorities showing this. Is that right?

thanx
No it is not right, you don't choose. If that were the case, I would choose to be tax resident in Barbados

Last edited by missile; Feb 19th 2011 at 12:58 pm.
missile is offline  
Old Feb 19th 2011, 1:34 pm
  #10  
Lost in BE Cyberspace
 
EsuriJohn's Avatar
 
Joined: Jun 2005
Location: Puente Esuri
Posts: 6,903
EsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond repute
Smile Re: Self employed uk resident working in spain

Originally Posted by twbag
Havent had any probs renting privately or with anything, they just require a large deposit and bank guarantee. Happy wk/end
Thats probably because they are not declaring for tax either.
EsuriJohn is offline  
Old Feb 19th 2011, 1:42 pm
  #11  
Retired and loving it!
 
snikpoh's Avatar
 
Joined: Sep 2007
Location: Ontinyent - Valencia region (campo)
Posts: 5,159
snikpoh has a reputation beyond reputesnikpoh has a reputation beyond reputesnikpoh has a reputation beyond reputesnikpoh has a reputation beyond reputesnikpoh has a reputation beyond reputesnikpoh has a reputation beyond reputesnikpoh has a reputation beyond reputesnikpoh has a reputation beyond reputesnikpoh has a reputation beyond reputesnikpoh has a reputation beyond reputesnikpoh has a reputation beyond repute
Default Re: Self employed uk resident working in spain

Originally Posted by twbag
Yes. Great advice. Except, I thought that under the double taxation treaty, I am only liable for tax in the country I select. For example: If Im in spain for more than 183 days and yet in Uk for 90, I can pay in the UK or Spain, but not both. Especially if I can show that I pass the fiscal residence test (resident in UK, habitual permanent domicile) and have the certificate from the UK authorities showing this. Is that right?

thanx
From what you say, I thought you had to declare tax residency in Spain for world-wide income and then offset any tax paid in UK (double taxation etc.).

There is certainly some overlap in terms of 90 or 183 days but, as said before, I think you are currently not correct and the bank is right.
snikpoh is offline  
Old Feb 19th 2011, 1:55 pm
  #12  
Lost in BE Cyberspace
 
EsuriJohn's Avatar
 
Joined: Jun 2005
Location: Puente Esuri
Posts: 6,903
EsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond reputeEsuriJohn has a reputation beyond repute
Smile Re: Self employed uk resident working in spain

Originally Posted by snikpoh
From what you say, I thought you had to declare tax residency in Spain for world-wide income and then offset any tax paid in UK (double taxation etc.).

There is certainly some overlap in terms of 90 or 183 days but, as said before, I think you are currently not correct and the bank is right.
Thats the way it pans out.
EsuriJohn is offline  
Old Feb 19th 2011, 3:02 pm
  #13  
Twb
Thread Starter
 
Joined: Feb 2011
Location: Exeter
Posts: 6
twbag is an unknown quantity at this point
Smile Re: Self employed uk resident working in spain

Many thanks for your advice.

10 years ago i had a meeting with spanish authorities and uk alike. according to the spanish hacienda,UK IR and the double taxation treaty, i can be in spain for up to 183 days and pay in the uk. However if im in spain for more than 183 (resident in spain) and 90 days in uk (resident in uk), i must have the certificate of fiscal residence, according to the treaty, from the uk IR. With this i can continue decaring tax in UK and working as self employed in uk and spain.

The question is, has there been some change since? has the goverment changed this and now im obliged to get the NIE even if im less than 90 or 183 days in spain? And this new spanish no residence certificate from the police?

I was always told that it is expensive and difficult for spanish authorities to prove one is more or less time in spanish territory. Whats more, with the certificate of residence in UK, specially made for spain, they probably wont look further unless one moves large amounts of money out of spain or see irregular activity.

What do you think?
twbag is offline  
Old Feb 19th 2011, 3:27 pm
  #14  
HBG
Lost in BE Cyberspace
 
Joined: May 2009
Location: Alicante province
Posts: 5,753
HBG has a reputation beyond reputeHBG has a reputation beyond reputeHBG has a reputation beyond reputeHBG has a reputation beyond reputeHBG has a reputation beyond reputeHBG has a reputation beyond reputeHBG has a reputation beyond reputeHBG has a reputation beyond reputeHBG has a reputation beyond reputeHBG has a reputation beyond reputeHBG has a reputation beyond repute
Default Re: Self employed uk resident working in spain

I don’t know if this is helpful, but the Spanish tax authorities are cracking down on ‘black’ money and in the Alicante area and they have openly stated that they are starting with expats.

I don’t know what the penalty is for not having a NIE number under your particular circumstances, but it sounds as though you have sufficient documents to baffle them for a while at least.

As Rotor pointed out, once you’re in the Spanish system, you’re ****ed.

(If you have a partner with a NIE, then on the very few occasions that you may need one, use theirs).
HBG is offline  
Old Feb 19th 2011, 3:32 pm
  #15  
 
Fred James's Avatar
 
Joined: Jun 2006
Location: Granada Costa
Posts: 10,898
Fred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond repute
Default Re: Self employed uk resident working in spain

Originally Posted by twbag
Many thanks for your advice.

10 years ago i had a meeting with spanish authorities and uk alike. according to the spanish hacienda,UK IR and the double taxation treaty, i can be in spain for up to 183 days and pay in the uk. However if im in spain for more than 183 (resident in spain) and 90 days in uk (resident in uk), i must have the certificate of fiscal residence, according to the treaty, from the uk IR. With this i can continue decaring tax in UK and working as self employed in uk and spain.

The question is, has there been some change since? has the goverment changed this and now im obliged to get the NIE even if im less than 90 or 183 days in spain? And this new spanish no residence certificate from the police?

I was always told that it is expensive and difficult for spanish authorities to prove one is more or less time in spanish territory. Whats more, with the certificate of residence in UK, specially made for spain, they probably wont look further unless one moves large amounts of money out of spain or see irregular activity.

What do you think?
It comes down to your habitual residence. The fact that you rent in Spain and own in the UK should not make any difference.

The UK will always be happy to issue you with a certificate of tax residency because they want the tax. You have to be very sure that Hacienda agree with this if you are now spending more than 183 days in Spain.

As for the NIE - as I said before, if you spend more than 90 consecutive days in Spain you are now obliged to register and will get an NIE - that is a change in the previous rules (about 2 years ago).

As for Hacienda finding it difficult to prove that you have been in the country for the relevant amount of time, you have that the wrong way round - if they challenge your residency status it is up to you to prove that you have not been in Spain for more than the 183 days.
Fred James is offline  

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.