The legality of working in Spain - CATCH 22 ?

I thought EU citizens don't need a work permit? Maybe I'm confused... but I thought it's only supposed to be really difficult if you're a non-EU citizen, like myself :(

work permit are need for taxes No ....... if you from the EU there free .......

If you are an UK Citizen your legal to come here without Visa....

So you wont be illegal unless your reged as a Dangerous person etc...

Mac

Judging by my experiences with Brits working over here, they pay little heed to the legalities...
Almost every job is paid Cash in Hand, very seldom are written contracts made, very seldom are receipts given so the client has little or no comeback when things go wrong or the 'tradesman' reneges on deals made.
Most 'tradesmen' and I use the term very loosely, run around in highly illegal unregistered British cars or vans and pass themselves off as tourists if the need arises for immediate health problems, they don't register for Spanish taxation or declare their income to the UK authorities either.

The point being of course that these people have so little regard for the Spanish Legal System that their clients have got no chance...

There are of course exceptions; there are a few honest people out here; unfortunately these have been among the first to succumb to 'la crisis' and have had to either jack it in and go back to the UK or join the ranks of the 'others'...

fb

> Judging by my experiences with Brits working over here, they pay little heed to the legalities...
Almost every job is paid Cash in Hand, very seldom are written contracts made, very seldom are receipts given so the client has little or no comeback when things go wrong or the 'tradesman' reneges on deals made.
Most 'tradesmen' and I use the term very loosely, run around in highly illegal unregistered British cars or vans and pass themselves off as tourists if the need arises for immediate health problems, they don't register for Spanish taxation or declare their income to the UK authorities either.

The point being of course that these people have so little regard for the Spanish Legal System that their clients have got no chance...

There are of course exceptions; there are a few honest people out here; unfortunately these have been among the first to succumb to 'la crisis' and have had to either jack it in and go back to the UK or join the ranks of the 'others'...

fb


a very interesting and relevant post................

I'm in the situation where i run a successful internet based busienss in the uk that i can operate anywhere in the world.

we're moving to spain and i am going to carry on the business HOWEVER

our accountant says we carry on paying tax and ni in the uk, but it appears that as far as the spanish are concerned, i can only do that for 6 months and then it has to become a spanish business? IS that correct?

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our accountant says we carry on paying tax and ni in the uk, but it appears that as far as the spanish are concerned, i can only do that for 6 months and then it has to become a spanish business? IS that correct?


Its a mined field.

Best advice is to seek professional advice either in the UK before you go or when you get there on your circumstances.

Tax is strict in both countries, they will not accept naivety and lack of knowledge as a defence neither will quoting "someone on a forum told me too" won`t stand much hope in court.

>

What actually happens if you are registered as ss="spellchecked_word">autonomo,is there room to live and pay all this or do I really need to accept that my friend is right and the big black economy is thriving much as it does in most countries.?


The black economy is usually reserved for the workers, few legitimate businesses dare to avoid there duties.

They prefer to employ illegal workers and avoid tax that way.

If you don`t register with Seguridad Social you wont get free health care.


>
I want to be legal ...but how can I be with a low income to begin with and not a stash of money behind me to support the ss payments.


If you cannot afford to be self employed, then you don`t become self employed.

Benefits are few and far between, there is some help for grants etc for immigrants.

You`ll need fluent Spanish lingo to get them/find them.

But I`m feelin kind today so try these people.


http://www.microbanklacaixa.es/general/


>
I welcome any constructive comments as I don't want to enjoy my new country looking over my shoulder,taking the back roads to avoid the Gardia or just slowly sinking into working illegally like so many others....is there an alternative ?




It is a legal requirement and rule of entry into any EU country by any EU citezen that the person can financially support themselves on entry to that country.

All EU countries can refuse and remove a person who is not able to financially support themselves.

Most don`t bother with the rule, but Spain is this week starting to look into regulating immigration from EU persons into Spain and they could legally impose a points system similar to Australia onto all EU migrants.

bigboss Hi, in answer to your question; I believe that to be the case.
If you intend settling here permanently the you have to register with the Spanish Taxman and the Spanish Social Security people.
You also need to register with the Spanish National Police firstly to get an NIE without which it is almost impossible to get anything done (like house purchase, installation of utilities electric,water, phone etc...)
Then within a presribed period you need to go back to the National Police to get a 'certificado de residencia.'
You also need to register with your local town hall wherever you elect to live and be put on the 'Padron' (Epadronimiento) (like the Electoral Roll in the UK); it doesn't do a lot for you but the local councils benefit by being able to get more cash from Regional Government for local services that are not covered by the Annual rates bills that are sent out; it does of course indicate to the local council the address to which to send the rates bills, though to be perfectly honest with you these rates bills are generally miniscule when compared with the Council Tax in England. My annuaul rates bill for my small house for this year is just over 120 euros...I was paying that every month in the UK!

So far as direct taxation is concerned I believe that what you have said is true but you need to talk to the UK Taxman...suggest tel 0151 210222 as a starting point...

hope some of this helps...

fb

i know what you mean but our accountant said UK and spain have a double tax treaty meaning that you only tax on earnings in ONE country not both and my uk business is exactly that, UK, based here, with british customers, who pay me in sterling, so i cant just close it down and start it up again in spain!

the national insurance people said i have to pay in spain not the uk but the tax say i have to carry on paying tax in the uk.

i am EXTREMELY confused.

>

i am EXTREMELY confused.


I`m no expert.

But Spain takes issue with the fact your actually in Spain doin the work, although the company is based in the UK, your not.

I believe you can register autonomo and pay an amount to Spain, a small amount, based on your UK contributions.

> [quote author="thebigboss" date="1247850578"]

i am EXTREMELY confused.


I`m no expert.

But Spain takes issue with the fact your actually in Spain doin the work, although the company is based in the UK, your not.

I believe you can register autonomo and pay an amount to Spain, a small amount, based on your UK contributions.[/quote]

cheers. I reckon i need some professional advice on this, more than i have already got.

its daft, we're all supposed to be european?!! One big happy family! (?)

I can tell you that the ammount you pay per month as a selfemployed person in Spain is ?250 a month.. I know doubt this will vary region to region but that is what I payed in Tarragona... ?250 covered everything including medical from social.

Mac

If your company is Uk registered you will pay UK taxes.

When you draw a salary from it that could be declared as income and declared to the Spanish tax man to pay Spanish income tax as a Spanish resident. (ie you decide to live here full time)

The main thing is to make sure that you pay somewhere and don't use living in Spain as a way of not declaring anywhere. You don't have to pay twice as your comments about the double taxation treaty are correct.

You are probably better off to continue paying your NI contributions in the UK, however that will not entitle you to Spanish national health cover after your initial period has expired. You could either pay as you go or take out a health insurance policy - or get treatment in the UK.

The system is really geared to people moving lock stock and barrel to another country but in your case, having the UK company that you want to use for income - you need to think it through and take professional advice.

PS You can choose what you decide to believe or not but the basic rate of social security payment for a Spanish self employed worker - autonomo, is in fact around 250 euros per month and many people do pay it for their health cover (all the family) and pension entitlements.

Gracias todos amigos, that's great advice, it all helps thank you.

Deffo need some pro advice, on the case already & found out loads, but its not crystal clear just yet. As far as i can tell, i can either pay tax in the uk or in spain and the UK HMRC seem to be cool with that? I would have thought Spanish tax on the self employed is quite hefty, or is that not the case? I kno wthe national insurance is a lot, but would maybe cheaper to not pay it but to get private insurance instead? I'm fairly fit and only 39, so i'm not gonna need the max level of cover.

Anyone else think the same?

You can't pay UK company tax in Spain, if it is registered in UK then it is liable to UK tax. As far as Spain is concerned you are not self employed here so you don't have to pay autonomo.

You are considered to be a tax resident if you spend more that 183 days in Spain so either don't or pay in the UK and the Spanish won't hassle you (yet anyway) but even if they do and you can prove you have paid UK income tax they can't tax you again.

However you might find the Spanish system is cheaper! there are more allowances like a mortgage for instance (if it is on your primary main residence)

Suggest you see if you settle in Spain first - tax is not a day 1 issue..................

agreed, and cherers for the advice, i very much appreciate it. :)

I think the bottom line is "get professional advice" which i'm of course going to do but i have to be careful as getting advice can be very expensive, especially if its the wrong advice!!!!!!

You may have found this if not its in English from the Spanish govt explaining taxation in Spain and has some useful links to govt web sites.

http://www.uv.es/ibanezs/SpanishTLRG.pdf

This is the govt web site for tax

http://www.agenciatributaria.es/wps/portal/Home?channel=1af861cd949a1010VgnVCM100000d7005a80____&ver=L&site=56d8237c0bc1ff00VgnVCM100000d7005a80____&idioma=es_ES&menu=0&img=0

We have recently purchased a house in Spain using a company called Wincham Inheritance Tax consultants-we bought this way for several reasons.
First of all because Wincham set us up as a Ltd Company in the UK,meant we didn't have to pay the 7% buyers tax and the sellers didn't have to pay 3% tax.Also we don't have to make Spanish wills.We don't pay Spanish inheritance tax which applies to all next of kin As the house was bought as a Company it simply means our shares will pass to our children without IHT .Most importantly for me,it means when I set up my business in Spain,I will only be taxed in England .Wincham will do my end of year taxes for me,and keep hold of all my legal documents which I can view online.They also set us up with a CIF number,which is the equivalent of a NEI number but for a company.Lastly,they also arranged our Spanish bank account,so all we had to do was turn up & sign a few documents.They made it extremely straightforward - we didn't even have to travel Spain for the house to be transferred to us.My contact at Wincham is a lovely chap called Mark Roach.Obviously there is a fee for their service,but I saved this just on the 7%.buyers tax.
P.S.-for those of you who already own a house in Spain,it would be worth talking to Mark about the Inheritance Tax implications,as your property could still be transferred into a LTD Company,saving thousand of pounds when the worst happens.
Hope this is helpful.

Sounds very clever and complicated.

Did you sign a document or have something in writing that all this was taken on advice and all liability lays with the company concerned.

As simply registering as a limited company and not actually trading or a business may be viewed by the authorities as tax avoidance.

That would be my main concern with these kinds of people.

And whether anybody has come across any legal precedence or is this a scam to sell before the authorities notice the hole in the law.

> We have recently purchased a house in Spain using a company called Wincham Inheritance Tax consultants-we bought this way for several reasons.
First of all because Wincham set us up as a Ltd Company in the UK,meant we didn't have to pay the 7% buyers tax and the sellers didn't have to pay 3% tax.Also we don't have to make Spanish wills.We don't pay Spanish inheritance tax which applies to all next of kin As the house was bought as a Company it simply means our shares will pass to our children without IHT .Most importantly for me,it means when I set up my business in Spain,I will only be taxed in England .Wincham will do my end of year taxes for me,and keep hold of all my legal documents which I can view online.They also set us up with a CIF number,which is the equivalent of a NEI number but for a company.Lastly,they also arranged our Spanish bank account,so all we had to do was turn up & sign a few documents.They made it extremely straightforward - we didn't even have to travel Spain for the house to be transferred to us.My contact at Wincham is a lovely chap called Mark Roach.Obviously there is a fee for their service,but I saved this just on the 7%.buyers tax.
P.S.-for those of you who already own a house in Spain,it would be worth talking to Mark about the Inheritance Tax implications,as your property could still be transferred into a LTD Company,saving thousand of pounds when the worst happens.
Hope this is helpful.


You may want to read this from this site.

http://www.spainexpat.com/spain/forum/viewthread/2814/

It points out that the setting up of limited companies is classed as anti avoidance and the IHT sellin is all over Expats.

Mr Roach is a member here and probably ever expat site available from what i`ve read.

i actually agree with you. It is too carefully worded and "gushing" to be a legit post. Suggest you report it as spam.

Mark has been selling and promoting this all over expat sites.

He even runs seminars to train others in the way of selling it.

One company is charging around 8,000 euros, most accountants charge around ?200.00 for similar advice as most of it is relatively straight forward once you`ve had simple instructions.

Thousands of sole traders set up LTD companies every week, its not difficult.

The biggest hurdle in Spain is they need it all translated into Spanish.

I personnally wouldn`t touch it until someone has managed to die and avoid the tax first, once a case has been tested then it can be classed as legit, otherwise it could be a legal minefield.