Anyone work remotely and live abroad?
- Thread starter Martynt74
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Cool. Well, knowing two people who work for a large media company who did exactly this last year (to Spain), I'll let them know. Assuming the authorities and InterPol haven't already done so (which, btw, they haven't).
In general, it's safe to assume you can dodge taxes for a while. Tax systems, after all, mostly rely on honest reporting from people. It's not wise to assume that breaking the rules will never catch up with you.
(Also, I don't know how it works in Spain, but here in Germany my taxes from last year haven't been processed yet, and they wouldn't have been in the UK either. "Last year" is nothing.)
When I say "tax", I mean to include health insurance, etc. that cover the same stuff that is paid for by tax in the UK. Sorry if that wasn't clear.
Just as an update. I had a call with a Spanish Gestoria yesterday.
Confirmed that being an EU citizen would make life a lot easier. My wife is going to crack on with applying for an Irish citizenship. I'm struggling to find any old documents for my Grandad and with only a name, DOB and rough location i imagine it's going to be difficult locating someone who left Romania in the 40's! Fortunately it seems that as long as one of us is from the EU then it's not too bad.
From a job point of view. He confirmed that the simple double tax treaty thing wouldn't work as people have mentioned in here. He talked me through the process of becoming an Autonomo (Self employed) and any vat/tax implications around that. The main issue would be with my wife becoming an Autonomo. It seems there's a minimum social security payment of ~€280 a month for anyone registered as Autonomo (There are reductions for the first few years), with my wife only working ~20 hours a week earning around £1k at the moment then this would wipe out a lot of her salary and we'd have to question if it was worthwhile. I did question whether i could invoice her company through myself but doesn't seem likely. Something for us to think about anyway.
As for the company needing to be registered in Spain, they didn't seem to agree that was necessary and were happy for me to be Spanish resident and just invoice a UK business (No vat for an individual invoicing a business which was another worry i had that i'd lose 21% straight away!). He suggested there was nothing like IR35 over there and being an Autonomo it's ok to work for 1 or multiple companies. This is a relief as it was a big stumbling block for me.
Still early days yet, and i've got the email of someone my parents know who's done virtually exactly as we want to do so i'm going to message him later on and see how he's done things.
Confirmed that being an EU citizen would make life a lot easier. My wife is going to crack on with applying for an Irish citizenship. I'm struggling to find any old documents for my Grandad and with only a name, DOB and rough location i imagine it's going to be difficult locating someone who left Romania in the 40's! Fortunately it seems that as long as one of us is from the EU then it's not too bad.
From a job point of view. He confirmed that the simple double tax treaty thing wouldn't work as people have mentioned in here. He talked me through the process of becoming an Autonomo (Self employed) and any vat/tax implications around that. The main issue would be with my wife becoming an Autonomo. It seems there's a minimum social security payment of ~€280 a month for anyone registered as Autonomo (There are reductions for the first few years), with my wife only working ~20 hours a week earning around £1k at the moment then this would wipe out a lot of her salary and we'd have to question if it was worthwhile. I did question whether i could invoice her company through myself but doesn't seem likely. Something for us to think about anyway.
As for the company needing to be registered in Spain, they didn't seem to agree that was necessary and were happy for me to be Spanish resident and just invoice a UK business (No vat for an individual invoicing a business which was another worry i had that i'd lose 21% straight away!). He suggested there was nothing like IR35 over there and being an Autonomo it's ok to work for 1 or multiple companies. This is a relief as it was a big stumbling block for me.
Still early days yet, and i've got the email of someone my parents know who's done virtually exactly as we want to do so i'm going to message him later on and see how he's done things.
Soldato
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Pretty much exactly as I said 
The company doesn't need to be registered in Spain because you would be an Autonomo.
If you were still employed by your current company but working in Spain, then that is when they would need to open an office, but not with you working as a self employed individual.
If you registered for VAT you wouldn't lose 21%. Where an EU business provides services to a business in the UK, VAT will not be chargeable in that providers state.
So basically you would invoice a usual and without VAT (but include the UK companies VAT number on your invoice just for a belt and braces approach). The UK company would then effectively invoice itself for VAT and then apply a reverse charge on its vat return.
social security fees are €300 plus a month, but there is a reduced plan of €60 per month for the first 12 months of self-employment. The payments then rise to €144.50 per month for months 13-18, and €202.30 per month from months 19-24.
For self-employed men under the age of 30 years and women under 35 years, there is a further reduction for an extra 12 months of 30%, bringing their total reduction period to 36 months.
The company doesn't need to be registered in Spain because you would be an Autonomo.
If you were still employed by your current company but working in Spain, then that is when they would need to open an office, but not with you working as a self employed individual.
If you registered for VAT you wouldn't lose 21%. Where an EU business provides services to a business in the UK, VAT will not be chargeable in that providers state.
So basically you would invoice a usual and without VAT (but include the UK companies VAT number on your invoice just for a belt and braces approach). The UK company would then effectively invoice itself for VAT and then apply a reverse charge on its vat return.
social security fees are €300 plus a month, but there is a reduced plan of €60 per month for the first 12 months of self-employment. The payments then rise to €144.50 per month for months 13-18, and €202.30 per month from months 19-24.
For self-employed men under the age of 30 years and women under 35 years, there is a further reduction for an extra 12 months of 30%, bringing their total reduction period to 36 months.
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Pretty much exactly as I said
Haha yeah, just seemed to be a lot of conflicting info in here and so was keen to try and confirm everything one way or another
It's looking more than do-able. Now for the long wait until we can properly start moving forward. Currently pulled down all my cd's from the loft and in the process of adding them to Discogs for cataloguing for selling. Some seem to be worth more than the token 50p i was expecting which is nice!
I hadn't realised the social security was tax deductible so that's a bonus i suppose. Still need to decide what's best for my wife as at the moment she's only just above the personal allowance and so doesn't pay much tax. €300 a month is a hefty increase. I guess it's just part of what needs to be done though. Maybe she could look for a payroll job with a Spanish Gestoria at some point!
Thanks for the advice.
Soldato
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Sorry, was doing a lot of cut and past, and so the post above was a mess. Cleaned it up a little.
I didn't realise SS was tax deductible either until recently. It's still a fair amount to pay out though if only earning a small income.
Personal allowance in Spain is less than half that in the UK.
I didn't realise SS was tax deductible either until recently. It's still a fair amount to pay out though if only earning a small income.
Personal allowance in Spain is less than half that in the UK.
Yeah, it's tempting for the small amount to just keep her registered in the UK as normal and hope it's not investigated. Not exactly the right thing to do, but you would hope that with me earning enough in Spain it could be overlooked, especially with her being an EU citizen.
I guess the other thing i'd need to consider is mortgage acceptance with being an Autonomo. Hopefully the fact i'd essentially be a fixed term external contractor would be enough for proof of that as a regular income though.
Also need to consider that since we'd still be British citizens, i could do with looking into whether it's worth continuing to top up my UK pension as i'll be some way short of the 35 years contributions. Hopefully i shouldn't need them, but always good to have that safety net. or whether i'll then move onto the Spanish system with paying their SS.
I agree, my company doesn't formally support it either but a number of people did this during lockdown, however they had to return within 90 days.
That's really great news that Spain doesn't have the same "Fake self-employed" scenario like you have in Germany and Austria - makes your life (and that of your Company) a lot easier!
Maybe since dividends are taxed the same as income (i think), there's less tax avoidance through those kind of setups so no need to clamp down on it.