In theory, is this doable?
 

I understand the 183 day ruling so, if I came to Spain on July 1st, stayed until December 31st= 183 days in 2016, then stayed until June 2017 then left until the end of the year=183 days in year 2. Is this legal???? I am looking at moving to Denia next year, my budget for everything is around €1350 per month. I don't drink or smoke, love to buy recycled stuff and to walk most places. I will, probably, have a motor scooter so will have to factor insurance etc. I am an early retiree, still a few years away from the official pension. Thanks in advance for any advice and for all of the info on the forum

Re: In theory, is this doable?
 

Hi and a warm welcome to the Spanish forum on BE. Myself and Fred James are the moderators for the Spanish forums whilst BEVS moderates Europe. Moderators are there to ensure that the site runs smoothly within the rules of BE. This is so that members gain the information that they are looking for and find their experiences on the forums to be friendly and worthwhile.

Problems and complaints should always be addressed to a moderator who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are usually friendly and helpful with a wealth of knowledge about the issues of living in Spain. I hope that you enjoy your time participating in the forums.

Please let me know if you need any further help.

Rosemary

Re: In theory, is this doable?
 

Don't think so.
I believe it's only up to 183 days in any 365 day period.

Re: In theory, is this doable?
 

I believe that in those circumstances you would not be in breach of the 183 day rule i.e. you would not become liable for Spanish income tax or required to complete the 720 form declaring assets etc. The reason for that is I believe the 183 days relates to within the tax year which as you say is 1 January to 31 Dec. However legally if staying in Spain for a period longer than 90 days you should sign on the foreigners register which entails all that applying for residency does, I.e. income proof of address contract or esrutira and medical cover.

Re: In theory, is this doable?
 

Having checked on it, I believe you are right Bob.
The 183 days in any 365 does apply to some countries, but as regards Spain it applies only to the tax year.

Re: In theory, is this doable?
 

Why try so hard to avoid paying tax in Spain?

You MUST pay tax somewhere so why not in Spain?

What's the big issue that you're trying to avoid?

Re: In theory, is this doable?
 

I pay tax in the UK, I don't own property anywhere. I don't want to get involved with moving tax affairs until I know where I am going to be resident. It probably will be Spain but I really don't know at this stage

Re: In theory, is this doable?
 

... makes sense.

Re: In theory, is this doable?
 

Well, it may be me, but that's a 184 days in 2016

Re: In theory, is this doable?
 

I know several who ignore this (and several other regulations :-( ) No one seems to check

Re: In theory, is this doable?
 

This Rule is another stupid piece of Spanish bureaucracy which the EU has allowed them to get away with. I know we don't have a United States of Europe, but like it or not, it is what we are heading to, eventually.

I know many many non Spanish EU people who just ignore the Rule. Afterall, we are all Europeans. I have no doubt there are reasons for the Rule, but whatever way you look at this, it is a Spanish solution to a Spanish problem and the Spaniards instead of biting the bullet just impose their solutions on all non Spaniards.

I have never seen any EU person expelled, fined, imprisoned as a result of the Rule.

Re: In theory, is this doable?
 

It is not a Spanish only rule as all EU countries use a set amount of days to determine when you should pay tax to that country, including the UK . Same with the 90 day rule which I believe is an EU rule. Or are you referring to the requirement to comply with the basic residency requirements if staying longer than 90 days. If so then yes if you stay in your holiday home say for 100 days who is going to bother with that rigmarole I agree.
Reality is and this is only my view if you are a second home owner and go over either of these limits set by a short period but do in fact split your time between Spain and UK and pay non resident tax then I can't see really what the great issue is. So far I have never exceeded the 183 day rule but have gone a few days over the 90 day Per visit by the odd couple of days. I certainly would not consider going through all that is entailed for 2 or 3 days, by the way reason for those couple of days was difference in travel costs nothing more. There will also be many like myself that if say they stayed 190 days and went through whole procedure of tax declaration would pay nothing in tax in my case because my only income is from Government pensions. So for a few days the whole thing would just be an expensive paperwork exercise as I would need to pay someone to do the paperwork.
In my experience I find the people that seem more interested in how long I am there and watching the days (I stress so far not gone over 183) are those that were under the radar completely for years until terrified by the 720 declaration! Maybe the op's calculation was 1 day over but so what? Maybe in that period they may pop back to UK or into Portugal etc.
I understand real tax fraud etc and those trying to get away with paying no tax anywhere but that is a different issue. Look further afield as far as EU countries are concerned they have thousands coming over no passport nothing are they counting their days? Are the French counting the days of all the people camped out at Calais? I would say know the rules and try to abide by them if you go the odd day over make your own decision sensibly and get on with your life while you can.

Re: In theory, is this doable?
 

Absolute rubbish!

Assuming you are referring to the tax rule, as Bob said, almost all countries in the EU have the same 183 day rule (or less), all that differs is the dates of the tax year.

If you think it's a stupid rule, then look at the UK tax residency rules - it is possible to be classified as tax resident after less than 30 days in the UK.

Re: In theory, is this doable?
 

I just want to stay legal, keep it simple and not pay more tax than I really have to- who does? I've tried googling it and I think I'd pay more tax in Spain as the allowances are lower and I've nothing to claim for. Maybe I should become a nomad and not be resident anywhere

Re: In theory, is this doable?
 

Becoming a Fical Nomad is possible, but quite difficult. For example, if you are currently a UK tax payer with income arising in the UK (such as pensions, State or private) and move, you will find it nigh on impossible to get HMRC to stop deducting tax from them unless you can prove that you are now paying the tax on that income somewhere else.

I tried it once and the taxman succinctly said that "I was not getting off his hook until I could show that I was on someone else's hook".

Re: In theory, is this doable?
 

The problem shows up when you make a stupid mistake.. For example, getting stopped at a Guardia civil checkpoint without your passport, or any proof that you are only "visiting" or are otherwise legally non-resident. At that point, they can impound your vehicle and demand you show up at the customs office to prove your legality and get your vehicle back. If in that process, you are unable to prove that you are not in violation, there's a broad range of legal options they have, from fines to deportation... There was a well publicised outrage from the EU a few years back about this practice, after the Guardia seized the car of a high ranking EU official visiting from Brussels because he couldn't prove his legality "on the spot".

Re: In theory, is this doable?
 

What I am saying is not rubbish. I am not advising people to dodge tax payments. Believe me, we in Ireland know enough about tax and have been taxed nearly out of existence over the past nine years of recession.

Most of us are liable for tax and we pay it in our own countries where we live. Some of us cut down hours or retire early and want an extended sun break and Spain is ideal for this. It is not unusual to do this and there's nothing wrong with a six/seven months break.

Enter Spanish Bureaucracy and indirect taxation income (i.e. tax paid on food, drink ,cigarettes etc) is not appreciated and "they" want "us" out or pay income tax (even in our pensions that are already tax deducted in Ireland) in Spain. This defies all economic logic. Tell you what, come to Ireland spend all you like and we'll do everything to keep you, but sadly, far less sunshine.

If Ireland ever leaves the EU it probably will be as a result of the likes of stupid Spanish Red Tape. And as were are continuously informed, we are all Europeans.

Re: In theory, is this doable?
 

As always when this subject comes up it goes way a way from where it started. The OP gave a set of circumstances asking if what they propose was doable? Reality is yes perfectly doable within current rules without a need to become tax resident. Someone then said in one year they would be one day over the 183 days (I personally don't see that) but if they are either go back or come out one day later or earlier. The only thing missing was the 90 day rule should they not go back to UK or take a short trip out of Spain. OK these rules are there and law but I agree with Leper if say you stay 92 days is anyone in reality going to go through the rigmarole of getting health insurance proving income etc etc etc ? I would not encourage people to break any law but let's be realistic please. As for being stopped well carry your passport because that is the law as well along with driving documentation. Only thing OP needs to concern themselves with as I see it given they will be in total living in Spain 12 months split over 2 tax years is decide how to deal with the 90 day rule (ignored as we know by many but down to choice) and work out how they will deal with any medical requirements as pushing the EHIC a bit unless you can show at least a short return to UK. As Fred pointed out the big problems will come should anyone try and avoid paying tax anywhere.

Re: In theory, is this doable?
 

Not quite correct. All pensions and annuities arising in Ireland are ONLY taxed in Ireland, not in Spain.


Double Taxation Treaty between Ireland and Spain

Articles 18 and 19

Re: In theory, is this doable?
 

Thank You Fred. But, if I were to be spending most of my time in Spain, I would have no problems paying income tax there rather than in Ireland. But, the Spanish Authorities would prefer me to be paying income tax in Spain and are not happy that it is only the indirect taxes that I must pay (on food etc). Not for the first time, Spain is shooting itself in the foot by putting laws where they are not needed and have lesser income as a result.

Re: In theory, is this doable?
 

You would not have the option to pay tax in Spain on your pensions. As I pointed out, it MUST be paid in Ireland. It's the same with UK Government pensions.

I really cannot see how Spain is shooting itself in the foot. If you don't like the tax system in Spain, perhaps you should find somewhere else where the rules suit you better - you do have a choice!

Re: In theory, is this doable?
 

If the new Irish DTT is similar to the UK one he will pay his tax on his GP in Ireland but from 1 Jan 2016 there will be a second charge from the Spanish tax authority which Fred refuses to let call a double tax!

Re: In theory, is this doable?
 

No, it's HMRC that refuse to call it a tax - otherwise it would not be allowed. That said, it "could" result in some people with significant other income, paying more tax overall, but many will not.

Re: In theory, is this doable?
 

Well, it may be me again, but I don't read it that way, I read it the same as the Spain/UK DTT.

The official term for the methodology where the income total includes income that is only taxable in the country of payment is "exemption with progression". The previous UK/Spain DTT used the "full exemption" method. Its a standard OECD methodology and has been around for many years. In fact its included in the Eire/Spain DTT which is dated 10th February 1994.

Re: In theory, is this doable?
 

You are of course right - read in haste , repent at leisure - I missed the residency bit.:thumbdown: but either way, you don't get taxed twice on the same income.

I'm always glad you are there looking over my shoulder!

Re: In theory, is this doable?
 

Can't quite see how one can provide proof of only visiting. What would one produce? Also the same with proving one is legally non-resident. I'm not necessarily doubting it, I just want it clarifying.
Thanks.

Re: In theory, is this doable?
 

If visiting, return tickets would help. As for proving non residency then it's a question of proving that you were somewhere else. Phone and utility bills, credit card transactions etc in another location would help but it would not be easy and it's down to you to prove absence.

That said, I can think of no circumstances where this would be likely to happen unless you were a very wealthy tax evader.

Re: In theory, is this doable?
 

I think that is exactly the point Fred. One thing that could cause a problem for a non resident is signing on the padron which many do. Not saying that would trigger a problem but it could. When I was looking into buying a vehicle many told me no way without signing padron. Research told me this was incorrect and in the end not being on it was not an issue. As you say Fred it is down to the individual to prove if residency becomes an issue but that is very unlikely in reality. Other thing I think non residents should ensure is that they pay the non resident tax, easy not to do but as well as being lawful it helps your non residency case.

Re: In theory, is this doable?
 

I think I'll stay put in Tz!Staying legal is more complicated than I thought, I'll need a long term tenancy so I'll need an NIE number? Is my budget realistic, €1350 or there abouts per month for everything.my NHS pension is taxed in the UK and I won't be getting the old age pension for ages yet.

Re: In theory, is this doable?
 

Have a look at Portugal and the Non Habitual residency scheme,details on the Portugal section of British expats.

Re: In theory, is this doable?
 

We mistakenly signed on the Padron initially. Thanks to the advice on this Forum we realised our mistake and took ourselves off.

Surprisingly we know a number of non resident home owners who still think that its the correct thing to do!

Re: In theory, is this doable?
 

It's not really surprising as many Town Halls encourage absolutely anyone to sign on. They do this for the simple reason that the more people on the Padron, the more money they get from central government.

The law is pretty clear, you must sign on the Padron in the locality in which you habitually live.

Habitually is the key word here. A non resident cannot possibly have a habitual residence in Spain.

Although there is no evidence to suggest that the tax office looks at the Padron, strictly speaking, if you declare that your habitual residence is in Spain, then you are likely to be considered to be tax resident.

Re: In theory, is this doable?
 

Thanks everyone for the replies, looks like I'll only be staying 182 days per calendar year as I'll have to pay more tax if I stay longer. I pay tax in the UK and I'd have to pay the difference to Spain if I become tax resident, the allowances before tax seem much lower than in the UK, therefore more tax payable. I live on a tight budget and this would almost break it, unless I go back to paid employment-shudder, shudder! I'm ok with 6 months a year in Spain, now where do I spend the other 6 months????

Re: In theory, is this doable?
 

So Spain would NOT be your main residence? That is, you will have your main house elsewhere?

If not, then your centre of economic interest would be Spain so a tax return would be required.

Why do you pay tax in UK - why not simply pay it in Spain?

Re: In theory, is this doable?
 

I don't own a house anywhere, few savings, monthly pension from the UK but not state pension. My family are, predominantly, in the UK. From what I've been able to find out, I would pay more tax in Spain if I was resident there, the equivalent increase is equal to around 80% of my monthly food bill, not economic sense. Lots of things to consider this is why I'll be coming for a trial run in 2016-rent a room, look at apartments, look at living costs etc. I need to be closer to the UK than I am now and Spain was always going to be 1st choice.

Re: In theory, is this doable?
 

Do the south of Spain and spend the other half of the year across the border in Portugal. Or do the summer in the south of France and head into Spain for the winter.

It's not an ideal existence though, is it. Too much moving around, so you'll never feel settled. But for some, it works.

Re: In theory, is this doable?
 

Is the pension you get a government pension? If so and your only income you would declare it but not pay tax to Spain on it. If private pension then different. As for centre of economic interest well depending on circumstances one can claim the UK with only 90 days there in the year. Not a route I would want to go down but possible.

Re: In theory, is this doable?
 

Other problem if on limited income and not state pension is going to be health care costs!

Re: In theory, is this doable?
 

If your only income is a private pension but you are not of retirement age it could be that depending on the type of pension Spain could be very friendly. They treat annuity pensions very lightly so you may not pay much tax at all. If you are over state retirement age the allowances are much better and at about €9000 pa you would not pay any tax.