weslane

Hi, I had posted this in the general Europe forum but was advised to post in the specific country forums also so I apologise if you have already read this..

I am a UK [and Australian] citizen. I have only lived in the UK for 9 months [jan - sept 2014] since Nov 2004. Apart from 2014, I've been living and working in the US since 2009. I am classed as a non-resident [for tax purposes] in both the UK and Australia. Australia is my domiciled country even though I was born in the UK.

I'm investigating the possibility of living in Spain but still work for my current employer. The company also has geographical presence in the UK, and i would be paid in GBP.

Can anyone advise me on what the tax situation would be, for either a PAYE employee or as a contractor [self-employed] if I telecommute to the UK from Spain? Also my wife does not have an EU passport [Aussie].

Thanks in advance for any help

cricketman

I have been in this situation for the past 5 years or so

If you are resident in Spain then you must pay social security and income tax payments in Spain. It does not matter where your employer is based

There are two ways to do this
1. Your employer opens a Spanish branch in Spain and puts you on a Spanish work contract
2. Or you become self employed and bill your UK employer each month while making sure you personally pay the monthly social security payments and quarterly income tax payments

weslane

Thx CricketMan.

I think only option 2 would be realistic...

Just for additional info..

The majority of the time i would be physically located in Spain, connecting remotely to work on my pc located in the London office.... i would be physically working in the UK office maybe every 4-6 weeks or so for a week.

Also, this would not be a permanent move, 18-24 months at most!

I have a friend who lives in spain and works remotely for a large multinational company based in the UK, they only pay tax in the UK, even tho they are never physically there... i assume that that is incorrect??

thx

cricketman

Yes they are breaking the law in a number of ways and committing tax and social security fraud

weslane

thx. are you able to share some links to social security and income tax in spain? also what do you do for health care? [is it part of the ss payments?]

cricketman

Social security payments are a minimum of 260 euros per month

Income tax i.e. IRPF depends on how much you earn

You can google if you want to look at the tax bands. Generally if you earn less than 30k euros per year then you will pay about the same income tax as in the UK. If you earn 50k or more, then you pay a bit more income tax than in the UK

Fred James

No, you will pay more in Spain than the UK even on a low income.

The personal allowances are lower and the tax rates are generally higher.