Hi all,
I moved to Madrid from Ireland at the beginning of this year and will need to start contributing tax to the Spanish system in a couple of months time. I am a software engineer who is working with an Irish company and have continued to do so remotely from my home in Spain. My company is not interested in registering with the Spanish tax system and so the advice I have received is to register as Autónomo "self-employed economically dependent". This would mean that I deal with a single customer only.
So here's the problem. If my company was to register with the Spanish tax system they would be paying roughly 30% social security and I would then be paying an additional 6%. The remaining money would then be taxed with income tax. If I register as Autonomo however I would only pay €264 per month in social security in total. Income tax again would be as normal.
Could this be seen as avoidance of tax on either my side or my companies as the social security payments are significantly lower with autonomo? In Ireland they are very strict with this sort of thing. If I was registered as a sole trader (autonomo) and worked with the same company for an extended period the tax officials could reclassify me as an employee and any tax not paid from the beginning of my employment would need to be paid. The company in this case is fully liable and for a small company it could be catastrophic. What I really want to know is if this is treated the same way in Spain? Or is it a completely legitimate way of doing business? Keep in mind that I will be invoicing the company who was my previous employer.
If anyone has any knowledge of this it would be much appreciated. Of course I will get legal advice on the matter but I would like to get a feel on which way it is likely to go.
I appreciate any input that you may have.
Thanks,
Anthony
I moved to Madrid from Ireland at the beginning of this year and will need to start contributing tax to the Spanish system in a couple of months time. I am a software engineer who is working with an Irish company and have continued to do so remotely from my home in Spain. My company is not interested in registering with the Spanish tax system and so the advice I have received is to register as Autónomo "self-employed economically dependent". This would mean that I deal with a single customer only.
So here's the problem. If my company was to register with the Spanish tax system they would be paying roughly 30% social security and I would then be paying an additional 6%. The remaining money would then be taxed with income tax. If I register as Autonomo however I would only pay €264 per month in social security in total. Income tax again would be as normal.
Could this be seen as avoidance of tax on either my side or my companies as the social security payments are significantly lower with autonomo? In Ireland they are very strict with this sort of thing. If I was registered as a sole trader (autonomo) and worked with the same company for an extended period the tax officials could reclassify me as an employee and any tax not paid from the beginning of my employment would need to be paid. The company in this case is fully liable and for a small company it could be catastrophic. What I really want to know is if this is treated the same way in Spain? Or is it a completely legitimate way of doing business? Keep in mind that I will be invoicing the company who was my previous employer.
If anyone has any knowledge of this it would be much appreciated. Of course I will get legal advice on the matter but I would like to get a feel on which way it is likely to go.
I appreciate any input that you may have.
Thanks,
Anthony