Spanish Tax on UK Employment Income

[Ellan_Vannin]

Hello,

I am thinking of moving to Spain later in the year and want to make sure I am clear about my tax liabilities.
I will be working on an oil platform on the UK Continental shelf for a company based in the UK so will be liable for UK income tax and NICS on my income from this employment.
I will be tax resident in Spain and understand that any income from employment outside of Spain through a non Spanish company is exempt from Spanish tax upto a certain level providing tax has already been paid on this income but I can not find any information anywhere as to what this level is.
I understand it was in excess of 60000 Euros in 2005.

Regards
EV

[Stravinsky]

Originally Posted by Ellan_Vannin

Hello,

I am thinking of moving to Spain later in the year and want to make sure I am clear about my tax liabilities.
I will be working on an oil platform on the UK Continental shelf for a company based in the UK so will be liable for UK income tax and NICS on my income from this employment.
I will be tax resident in Spain and understand that any income from employment outside of Spain through a non Spanish company is exempt from Spanish tax upto a certain level providing tax has already been paid on this income but I can not find any information anywhere as to what this level is.
I understand it was in excess of 60000 Euros in 2005.

Regards
EV

Hiya

I have to admit I know nothing about what you are quoting .... if you are resident in Spain for more than 183 days then you are a tax resident normally and you would normally apply for tax zero rating in the UK and be liable for Spanish tax on your income. If something especially applies to you as an Oil worker then I'm not usre

[chris(madrid)]

Sorry I don't know any limit - BUT certainly tax paid in one EEC country is tax acredited if you declare tax (and you will be from all accounts) in another. I pay some taxes (things like interest paid net) still in the UK and they are not re-taxed here.

It was the case (maybe still is) that countries in adjoining borders could pass tax from one to t'other (i.e live holland - work germany and you could choose where you paid) but the UK had the simple issue that it shares borders basically only with EIRE and to the best of my recollection it was a Euro only deal too.

Spain will simply claim their dues from UK.

If I were you I'd find a good advisor/accountant. Surely an oil company MUST have folk on board who know this. But I have a visit with our advisor on Thursday - will see if there is any easy info to be had.

Take into account that capital is STILL (though is set to go next year) TAXED in Spain. So capital you have outside Spain LEGALLY should be declared.

As soon as you set the mailing address on a UK bank to you Spanish address - Spain will know! - European Savings Directive.

[Ellan_Vannin]

Hi,

Thanks for the responses.
The references I have are as follows:

From the book "Living in Spain" written by Blevins Franks which was published in 2005 it states that the limit for exemption from Spanish Income Tax is up to 60,101.21 Euros per year.

Also from here "www(dot)financialadviceinspain(dot)com/dl/Spain%20Tax%20guide.pdf"
"Income generated from employment overseas (i.e. outside of Spain) are tax exempt up to a certain limit provided that the work is
undertaken for a company non-resident in Spain or for a permanent establishment located outside of Spain and provided that a tax
similar to the Spanish Personal Income Tax is applied in the territory where the work is undertaken. In addition the territory must
not be considered a ‘tax haven’ by the Spanish tax authorities."

I think that this is the section of the Spain - UK Tax treaty that the above refers to Spain: double taxation agreement, Article 15 Employments on the HMRC site.

I am indeed going to get professional tax advice as I think my situation could become quite complicated but I want to make sure I have a good handle on my options before I do so.

If you could find out what the current limit is from your advisor it would be much appreciated

Regards
EV

[crookesey]

Originally Posted by Stravinsky

Hiya

I have to admit I know nothing about what you are quoting .... if you are resident in Spain for more than 183 days then you are a tax resident normally and you would normally apply for tax zero rating in the UK and be liable for Spanish tax on your income. If something especially applies to you as an Oil worker then I'm not usre

OK but what would happen in respect of the following.

You buy your Spanish property either in your name or in that of a UK Ltd company. You don't open a Spanish bank account, instead you open something like a Nationwide FlexAccount where you charge the card up in the UK by telephone or internet instructions and use Spanish ATM's to withdraw money and use your card to make purchases, pay bills etc; free of any bank charges.

How would the Spanish Authorites have any idea if you had spent more than 183 days in the country? Passports are no longer date stamped and other than you telling the authorities why would they ask? This is particulally relevant to people who do no paid work in Spain, such as the over 65's living on UK pensions and UK savings and wanting to fully utilise their UK tax allowances of £9030 each.

[chris(madrid)]

More and more UK banks are forced to declare clients in other EEC countries. As long as you retain a UK address for all mail - you might get away with it.

THE MINUTE you ask for statements etc to be sent to Spain (new accounts anyway) - Spanish inland revenue is advised. You'ld have to run a UK registered car - and make sure it's taxed/mot'd insured etc. Need a doctor? after you've had a couple of "holiday" visits to your local Spanish GP - they'll know.

Loopholes are being shut very fast at the mo' - mostly to deal with other illegal immigrants. But being resident here and not registerred as such - makes you just that - illegal. Once it's all electronically centralised (and that's soon btw) - my guess is that loads will get caught.

I've lived around banks most of my life - changing currencies ALWAYS costs money - but they're good at making it less visible now.

[crookesey]

Originally Posted by chris(madrid)

More and more UK banks are forced to declare clients in other EEC countries. As long as you retain a UK address for all mail - you might get away with it.

THE MINUTE you ask for statements etc to be sent to Spain (new accounts anyway) - Spanish inland revenue is advised. You'ld have to run a UK registered car - and make sure it's taxed/mot'd insured etc. Need a doctor? after you've had a couple of "holiday" visits to your local Spanish GP - they'll know.

Loopholes are being shut very fast at the mo' - mostly to deal with other illegal immigrants. But being resident here and not registerred as such - makes you just that - illegal. Once it's all electronically centralised (and that's soon btw) - my guess is that loads will get caught.

I've lived around banks most of my life - changing currencies ALWAYS costs money - but they're good at making it less visible now.

Are you saying that only residents can buy and run Spanish registered cars? I thought that all that was required was a Spanish ID card, Spanish insurance and a full UK driving licence.

[Stravinsky]

Originally Posted by crookesey

Are you saying that only residents can buy and run Spanish registered cars? I thought that all that was required was a Spanish ID card, Spanish insurance and a full UK driving licence.

Well in theory a Spanish resident cannot drive a UK plated car, because as a Spanish resident you should be matriculating it.

To register our Spanish car in our name we had to produce (this was 12 months ago) our Padron, NIE, passport, and now I have been told people are often being asked for your residence certificate also.

As time goes on, more and more things will require you to produce your resident certificate, and that hopefully will go a long way to flushing out the illegals here.

[covfan71]

I thought you had to have a spanish bank account and NIE number in order to pay bills etc.

[chris(madrid)]

Originally Posted by crookesey

Are you saying that only residents can buy and run Spanish registered cars? I thought that all that was required was a Spanish ID card, Spanish insurance and a full UK driving licence.

And just how do you expect to get a valid SPANISH ID CARD if you're not
1) Spanish Citizen
2) Resident in Spain.
?

To get the old NIE ID you had to be empadronado in order to show a SPANISH residence!

btw anybody who thinks the Spanish plod dont know where to look for a UK tax disc - the ones put on traffic duty do!