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Spanish or UK Tax

Spanish or UK Tax

Old Feb 9th 2019, 9:53 am
  #31  
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Default Re: Spanish or UK Tax

The autonomo way looks quite complicated too, since I guess that you would have to, on top of pay the IRPF + Social Security, the VAT(IVA) of the bill.
I am not an accountant so I am not sure about this, but seems like a lot of money would be skimmed along the way.

If it wasn't for brexit, we could be considered as posted workers up to 2 years, and then take the autonomo route.
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Old Feb 9th 2019, 9:57 am
  #32  
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Default Re: Spanish or UK Tax

Originally Posted by wirt0
The autonomo way looks quite complicated too, since I guess that you would have to, on top of pay the IRPF + Social Security, the VAT(IVA) of the bill.
I am not an accountant so I am not sure about this, but seems like a lot of money would be skimmed along the way.

If it wasn't for brexit, we could be considered as posted workers up to 2 years, and then take the autonomo route.
Yes the VAT was a concern for me too. However the Spanish advice I've taken said the VAT rate for work charged to UK company is 0% - has to be on invoice but is zero!
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Old Feb 9th 2019, 10:05 am
  #33  
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Default Re: Spanish or UK Tax

Thanks chslh66, thats why one Tax advisor in Spain told me, because there is no goods moving across borders. Would this change with Brexit? I'm hoping no!.

Still would like to find a way to do it being a employee of my current company. Are you sure it would be a 0% VAT?

So only paying IRPF + Social Security?

What about the IR35? I guess that because you live abroad it wouldn't be a fraud, correct?
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Old Feb 9th 2019, 10:11 am
  #34  
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Default Re: Spanish or UK Tax

Originally Posted by wirt0
Thanks chslh66, thats why one Tax advisor in Spain told me, because there is no goods moving across borders. Would this change with Brexit? I'm hoping no!.

Still would like to find a way to do it being a employee of my current company. Are you sure it would be a 0% VAT?

So only paying IRPF + Social Security?

What about the IR35? I guess that because you live abroad it wouldn't be a fraud, correct?
The gestor I took advice from said it's 0% after Brexit.

IR35 - not familiar with that .... is that a UK or Spanish thing? If UK it won't apply.

Agreed, I'd prefer to stay a UK company employee and can't see why not provided the tax is paid to Spain and I took private healthcare - but this isnt what current advice is saying!
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Old Feb 9th 2019, 10:23 am
  #35  
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Default Re: Spanish or UK Tax

Originally Posted by chslh66
The gestor I took advice from said it's 0% after Brexit.

IR35 - not familiar with that .... is that a UK or Spanish thing? If UK it won't apply.

Agreed, I'd prefer to stay a UK company employee and can't see why not provided the tax is paid to Spain and I took private healthcare - but this isnt what current advice is saying!
IR35 its a UK thing, meant to avoid employees being hired as a contractors (and thus avoiding paying higher taxes).
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Old Feb 9th 2019, 10:30 am
  #36  
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Default Re: Spanish or UK Tax

Originally Posted by wirt0
IR35 its a UK thing, meant to avoid employees being hired as a contractors (and thus avoiding paying higher taxes).
Bloody hell .... another thing to consider!
I'd assume not applicable to us as we'd be Spanish tax resident.
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Old Feb 9th 2019, 12:14 pm
  #37  
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Default Re: Spanish or UK Tax

Thats why I would still like to know if its possible the way James is describing.
Hopefully I can get in contact with a lawyer / accountant soon, I have send some emails but no response yet!.
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Old Feb 9th 2019, 1:13 pm
  #38  
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Default Re: Spanish or UK Tax

I've tried Malaga Law as they have Malaga and London offices and appear experienced according to website. Also my UK accountant looking at it.
​​​Will let you know once I hear - if you could do the same please.
Let me know email and I'll forward you my email conversation with Andalusian gestor which you might like to read?
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Old Feb 9th 2019, 2:15 pm
  #39  
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Default Re: Spanish or UK Tax

Originally Posted by wirt0
T
Still would like to find a way to do it being a employee of my current company.
I don't know about Spain, but the EU has rules for workers who live in one country an employee of a company in a different country.
If you carry out your work in the country of your employer you are a cross border worker https://europa.eu/youreurope/citizen...s/index_en.htm and you need HMRC to issue you with the relevant paperwork.
If you carry out your work remotely in your home country then either you are a posted worker but more likely HMRC would not agree to that. https://ec.europa.eu/social/main.jsp?catId=471
The general rule in the EU is that your employer pays social security contributions in the country where you carry out the work. I know how it works in France, and this How To Guides - Working For A Uk Employer In Spain | Tumbit How To Guide suggests that it works pretty much the same in Spain but it is an old thread so things may have changed.
I would have thought that if you need to prove you've been exercising freedom of movement correctly in order to get a residence permit, it would be better to stick to the rules to cover your back. I know that for carte de séjour applications in France, if you are claiming "worker" status under FoM they look at where your income comes from and what social contributions you have paid, and if you're not paying into French social security and don't have an S1, they would reject your application straight away. I know Spain interprets things differently but if there is a deal and if the EU decides what criteria countries should apply, what will happen. I don't know but to me, if you're seriously considering a move at this late stage you need to have the right paperwork to back you up. If you're not working in Spain, how will you make a case for being resident. Spain isn't the centre of your economic interests and you haven't got time to get in 183 days residence before 29 March so what's different between you, and someone who lives and works in the UK and just happened to be spending a few weeks on holiday in Spain just before Brexit?
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Old Feb 9th 2019, 2:46 pm
  #40  
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Default Re: Spanish or UK Tax

Originally Posted by EuroTrash
I don't know about Spain, but the EU has rules for workers who live in one country an employee of a company in a different country.
If you carry out your work in the country of your employer you are a cross border worker https://europa.eu/youreurope/citizen...s/index_en.htm and you need HMRC to issue you with the relevant paperwork.
If you carry out your work remotely in your home country then either you are a posted worker but more likely HMRC would not agree to that. https://ec.europa.eu/social/main.jsp?catId=471
The general rule in the EU is that your employer pays social security contributions in the country where you carry out the work. I know how it works in France, and this How To Guides - Working For A Uk Employer In Spain | Tumbit How To Guide suggests that it works pretty much the same in Spain but it is an old thread so things may have changed.
I would have thought that if you need to prove you've been exercising freedom of movement correctly in order to get a residence permit, it would be better to stick to the rules to cover your back. I know that for carte de séjour applications in France, if you are claiming "worker" status under FoM they look at where your income comes from and what social contributions you have paid, and if you're not paying into French social security and don't have an S1, they would reject your application straight away. I know Spain interprets things differently but if there is a deal and if the EU decides what criteria countries should apply, what will happen. I don't know but to me, if you're seriously considering a move at this late stage you need to have the right paperwork to back you up. If you're not working in Spain, how will you make a case for being resident. Spain isn't the centre of your economic interests and you haven't got time to get in 183 days residence before 29 March so what's different between you, and someone who lives and works in the UK and just happened to be spending a few weeks on holiday in Spain just before Brexit?
Hi EuroTrash,

Thanks for your contribution in this post.

I have read about posted workers, but I have assumed that this will end after Brexit, with out without hard brexit (unless if there is a separated agreement).

I think that as a posted worker, where you pay taxes depends of how long you have been posted for.
As a posted worker, you will continue to be covered by the social security system of your home country for a maximum of 2 years. Find out what formalities you need to carry out.
So as a posted worker, first two years I would be paying taxes in the UK.

You can only extendi it more than 2 years under special circumstances

Can you stay longer than 2 years?

In some exceptional situations, your employer may ask for an extension of your initial posting period until your planned work has been completed:
  • If it becomes clear that your work can't be completed within 24 months because of unforeseen circumstances that delay your work, for example, an environmental disaster, delays in delivery, etc.
  • If you fall seriously ill for a couple of months.
:
Source:https://europa.eu/youreurope/citizen...s/index_en.htm

So that would not be a long therm solution, if possible anyways, due to the departure of the UK from the EU.

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Old Feb 9th 2019, 3:01 pm
  #41  
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Default Re: Spanish or UK Tax

WirtO - emailed you
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Old Feb 9th 2019, 3:06 pm
  #42  
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Default Re: Spanish or UK Tax

thanks chslh66
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Old Feb 9th 2019, 3:08 pm
  #43  
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Default Re: Spanish or UK Tax

Posted worker is by definition a temporary arrangement which is why I said HMRC would probably not agree. If you intend to live and work permanently in Spain you are not a posted worker. The reason behind the scheme is simply that if a worker is only posted abroad for a few months, it would be more hassle that it's worth coming out of one social security and tax system and going into another, and then swapping back when the posting ends. That's why it's time limited and 2 years is absolute max. When you apply you have to explain the reason for the posting, usually it is seasonal workers or to work on a specific project, HMRC won't agree if they think it is going to be a permanent arrangement. In any case as a posted worker you would probably be classed as UK resident who is temporarily staying in the other country so it is not a good way to establish residency.

In France the only correct way for a UK employer to employ someone working remotely from their home in France is for the UK employer to register the employee with the French authorities as a resident worker, and pay social security contributions into the French social security system. As a resident worker paying full social contributions and taxes in France you are rock solid on residency requirements so you are sure of your residence permit. AFAIK under EU rules this should be the same in any EU country; but I know very little about Spain, they might be less strict or do it differently.
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Old Feb 9th 2019, 3:26 pm
  #44  
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Default Re: Spanish or UK Tax

Originally Posted by EuroTrash
Posted worker is by definition a temporary arrangement which is why I said HMRC would probably not agree. If you intend to live and work permanently in Spain you are not a posted worker. The reason behind the scheme is simply that if a worker is only posted abroad for a few months, it would be more hassle that it's worth coming out of one social security and tax system and going into another, and then swapping back when the posting ends. That's why it's time limited and 2 years is absolute max. When you apply you have to explain the reason for the posting, usually it is seasonal workers or to work on a specific project, HMRC won't agree if they think it is going to be a permanent arrangement. In any case as a posted worker you would probably be classed as UK resident who is temporarily staying in the other country so it is not a good way to establish residency.

In France the only correct way for a UK employer to employ someone working remotely from their home in France is for the UK employer to register the employee with the French authorities as a resident worker, and pay social security contributions into the French social security system. As a resident worker paying full social contributions and taxes in France you are rock solid on residency requirements so you are sure of your residence permit. AFAIK under EU rules this should be the same in any EU country; but I know very little about Spain, they might be less strict or do it differently.
Hi EuroTrash,

Yes, this is possible but the the UK company will need to get a VAT number in Spain, and pay for a accountant ~400e month. So it becomes highly inefficient.
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Old Feb 9th 2019, 3:45 pm
  #45  
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Default Re: Spanish or UK Tax

Yes there is that.
At the end of the day the most efficient way of running a company is usually to keep things simple and minimise complexities. Introducing the complexity of an international aspect is not usually the best way to keep things simple. You would only do this if there is a benefit to you, so I guess it comes down to, how much is that benefit worth?
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