Tax Advice

[TinaP]

We are moving to Spain hopefully end of September. I'm due to speak to my MD in the next few weeks to discuss this move and see if he agrees!

At the moment I work remotely at home in the UK so will continue doing the same job but based from the villa in Spain.

Can anyone advise me how to work out the tax difference on my annual salary between being resident in Spain and resident in the UK? If it works out that the UK is better then we may look at staying less than the 183 days in Spain to retain uk residency.

What are the tax allowances for income tax in Spain? Also how does my employer pay my salary - normal UK bank account in sterling or spanish bank account?

If I become tax exempt in Spain does my employer just pay me my gross monthly salary and I pay tax at the end of the spanish tax year.?

Confused??!! Sorry but this is why I never went into accounts and did recruitment instead lol!

Any advice or referral to websites would be fantastic. PM me if you need salary details/tax codes etc

[coachfiona]

The tax rate for a normal employee in Spain is around 15% but is dependent on how much you earn. If you are earning money from the UK and it is being paid to you in the UK then you can pay tax there. There are several ways of registering for tax here. You can register as an autonomo (freelance) but your company pays the tax or you can register as completely freelance which means that you have to do a tax return and pay your own taxes dependent on what you are earning.

(SNIP)

Hope that helps.

Fiona

[SunnySpain]

Hello TinaP

I would be very interested to know similar information, as I am also thinking
about relocating to Spain. I also work in Recruitment, but am self-employed

Information I have acquired already is as follows:

Income tax in Spain is higher than the UK
If you become a resident in Spain, you can no longer access the NHS

I also think that dividends are classed as Income in Spain, not all dividends
in the UK are classed as such. If anyone knows the answer please help !

[TinaP]

Hi

I've just spoken to my MD about moving to Spain and he's willing to give it a go to see how it works out.

We discussed the tax implications etc and he's going to speak to his Accountant and let me know the best way forward. As soon as I know more I'll let you know.

I was sure that the tax in Spain is lower than the UK but have no firm evidence of this ...

What recruitment sector do you work in? Looking for any help??!!!

[chris(madrid)]

Originally Posted by SunnySpain

If you become a resident in Spain, you can no longer access the NHS

As a paid up resident - You'll have access to The Spanish NHS - which imo is in many ways better!

[SunnySpain]

Thank you Chris from Madrid !

In reply to Tina P

I work as a self-employed Recruitment consultant in the Engineering sector

To be honest I have been doing alright on my own for several years now,
but I might consider taking someone on in the future, depends really

Be nice to keep in contact with you either way.

I think my tax problems are slightly different to yours, as I don't pay
NI or income tax in the UK, only Corporation tax based on profits

They call it company tax in Spain and its paid at a higher rate of 25%,
whereas in the UK its payable at 21%

My question is whether I can continue to pay CT in the UK and become
a legal resident in Spain. Chris from Madrid has kindly answered the health
insurance part of my question, whereby it seems I need to register as self-employed and pay 238 Euros a month, which would cover an entire family

I would be living with my partner and our soon to be born daughter, so that information is much appreciated and thank you very much, Chris.

Please let me know anything you can find out about tax issues and residency
as we really want to live in Spain. We have spent several months looking at different areas of the country and have a good idea where we want to live.

Regards, Dave

[TinaP]

Hi Dave

This is a really helpful forum and I've found lots of people willing to share their expertise.

Your tax is different to mine in that I'm PAYE for a UK company but I work remotely from home so will continue doing the same but in Spain.

Any info I find out though I'll put on here just in case it's any use in the future

My line of recruitment is Occupational Health so if you know of any big UK clients that might be interested let me know !!

Might venture into overseas recruitment in the future when I'm fully fluent in Spanish - occupational health is taking off so much overseas.

Anyway I'll be in touch when I have any more info

Tina

[chris(madrid)]

Dave - iirc if you're AUTONOMO which you'll need to be to get that 238 rate - you'll need to ALSO show earnings eventually and declare TAX/VAT every 3 months. It's improving I believe but still a PITA.

Also be careful when registering that your partner is understood to be your (albeit common law) wife. Have seen one or two "disputes" over dependencies in the past.

There is a way maybe of having a Sociedad Limitatada Unipersonal registerred but that requires an employee (you?) on the books.

SLs certainly had a different flat rate on earnings - SLU's I believe was different again - but I've been out of it for several years now. It was about 20% when I was involved.

Serious recommendation is that you look out a VERY GOOD financial advisor who knows Spain and UK ins and outs.

Most regional "Camara de Comercio" offer good sound advice - but Generally only in Spanish. They do booklets on what you need to do to establish yourself business wise. Maybe you'll find they'll even have incentives for overseas investment and "employment creation" - depends region to region.

[SunnySpain]

Hi Chris,

Yes I think its going to have to be a visit to an IFA

The only IFA I know has no knowledge of the ins and outs in Spain

I have read and re-read the double tax treaty, but my situation dos not seem to be covered, as I am self-employed and my company is registered in the UK

I don't want to commit to Paying Corporation at the higher rate in Spain
and the dividends and drawings I take from the business would also be taxable under Spanish law. So its a tricky one thats for sure !

Going back to health cover. My partner was born in Venezuela, although she is classed as Spanish as her parents are both from Spain. However because she is out of work and has never paid into the Spanish system they are saying to her that she is not entitled to medical cover either.

Finding the relevant information is certainly not easy.

Regards, Dave

[Sharon J]

Hi Dave,

My partner is an IFA in Spain and works for a firm that is regulated under the spanish authorities. You didn't say what region you are thinking of moving to so if you let me know he may be able to put you in touch with someone.