# Freelance thinking of Spain a couple of questions



## graemeboro (Oct 17, 2007)

Hello All,

I am living in the UK at present and am running a small Information Security Consultancy as a freelance consultant. Essentially my work takes me anywhere on a short term basis, so I travel and stay a way a lot, including various places in Europe. On this note it means my location doesnt matter too much.

I have been thinking of moving to Spain for a while (and still freelancing around Europe) but had a couple of questions.

Firstly on the tax front my company is registered in the UK. If I moved it to Spain what kind of tax would I pay, or could I leave the company in the UK, I am a bit confused on this one.

Secondly what would it cost to send my daughter 10, to an English speaking school?

I would love to relocate to Andalucia ideally, at least with our time off, there should be a much nicer lifestyle.

Thanks in advance.
Graeme


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## jojo (Sep 20, 2007)

graemeboro said:


> Secondly what would it cost to send my daughter 10, to an English speaking school?
> 
> I would love to relocate to Andalucia ideally, at least with our time off, there should be a much nicer lifestyle.
> 
> ...


I cant really help with the business questions. I can tell you that there are lots of English speaking/international schools in Andalucia - its a big place tho, so you need to narrow it down. Judging from your business you may well need to be near an airport. Anyway, I think the cost of the schools is anything from about 1500 euros a term, but i guess it depends where, reputation etc..

See if you can decide on an area of Andalucia and then google international schools there. 

Jo x

Jo


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## chris(madrid) (Mar 23, 2008)

If I were you I'd find a good IFA/tax advisor.

THE MINUTE YOU ARE A SPANISH RESIDENT - YOU WILL HAVE TO DECLARE TAX HERE. It all depends how your company and you are registered. From the little I know about registering a UK company from my brother - it's VERY different here.

There are reciprocal agreements but you need REAL QUALIFIED (not forum) help.

As for Spains lifestyle - I'd do a bit of serious research. Living here can be VERY trialsome if you are NOT capable in Spanish. Sounds as if you'll be away a lot - but your family?


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## jaan (Feb 10, 2009)

I'm an illustrator and graphic designer. I also freelance for clients in different countries but usually don't have to go to them, only some flights for meetings with regular clients from time to time.

I have my company registered in Warsaw and i issue invoices just like they would be issued in Warsaw. Therefore all my taxes stay in Poland. It's generally just like i would be there all the time.
Even if i worked for client here in Malaga (which probably wont happen, because that would have to be some ****ty client) i would send him polish invoice.

I had to get infamous NIE number (tax identification number for foreigners) to rent a flat, but that was fast and easy. I wont have tax issues tho, because i will not have any income in spain.

Everything is quite easy now days inside European Union. I have my polish mobile with me and when someone calls me he doesn't even know im out of country, roaming prices are reasonable in EU. Malaga also has quite good communicated airport. Prices for tickets (even in-direct) are not high, and there are many flights for hub cities every day.

I would suggest you to keep your company in your mainland and do just like i do. If you don't want to, you should also do research on Gibraltar. My friend told me that many people from here have companies registered in Gibraltar because of some preference tax regulations. And if you have to go there from time to time to sign something its close enough.


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## Buenosdiaspet (Feb 13, 2009)

The national association of british schools in spain is a good place to look for schools info - website is the initials . org I think.

If you are working for your UK company in Spain you need to get good international business tax advice, it is critical that your company does not become 'effectively managed' in Spain, otherwise it (not just you!) are by default Spanish resident, and it becomes very complicated and expensive. Worth paying for good advice before you come! Good luck!


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## Stravinsky (Aug 12, 2007)

jaan said:


> I have my company registered in Warsaw and i issue invoices just like they would be issued in Warsaw. Therefore all my taxes stay in Poland. It's generally just like i would be there all the time.
> I would suggest you to keep your company in your mainland and do just like i do. If you don't want to, you should also do research on Gibraltar. My friend told me that many people from here have companies registered in Gibraltar because of some preference tax regulations. And if you have to go there from time to time to sign something its close enough.


I think you need to take some serious tax advice before going down this road, because if you are a resident in Spain then your tax residency will be the country of residence, so if you have income in the UK, Poland, etc, then the tax man in Spain will be wanting to see you. You dont pay twice due to the double taxation treaty, but in general terms if you are a permanent resident in Spain then you pay your tax on income here. In the same way you used to pay Wealth Tax in Spain on your worldwide assets if you were a spanish resident, and you will be liable to Inheritence tax in Spain as a spanish resident.


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## chris(madrid) (Mar 23, 2008)

Stravinsky said:


> I think you need to take some serious tax advice before going down this road, because if you are a resident in Spain then your tax residency will be the country of residence, so if you have income in the UK, Poland, etc, then the tax man in Spain will be wanting to see you. You dont pay twice due to the double taxation treaty, but in general terms if you are a permanent resident in Spain then you pay your tax on income here. In the same way you used to pay Wealth Tax in Spain on your worldwide assets if you were a spanish resident, and you will be liable to Inheritence tax in Spain as a spanish resident.


Strav beat me to it, Jaan. BE VERY VERY CAREFUL - You have a NIE so the Spanish Taxman KNOWS where to find you. And they will!


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## jaan (Feb 10, 2009)

Hmm, you may be right, i will get some tax advice then. 
However i don't think this situation is too complicated and i believe if there are gonna be some issues they should be easy to sort out. Because as i wrote before i still have all my things in Warsaw. There is my company, my office is all the time there and officially it looks like i am doing my work from there.

NIE number was needed to rent a flat, start a bank account and to connect internet. If they ask me, my official version is that im renting flat here to spend my free time here and i still live in warsaw, they won't check how often i travel and they can't track my time spent here and there.

But of course its better to have some legal support on this.

thax


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## jojo (Sep 20, 2007)

jaan said:


> they won't check how often i travel and they can't track my time spent here and there.


I'm not a business person (so forgive me if I have got this a bit wrong??????????), but I do know that my husband who runs a company in the UK is NOT allowed to spend more than 180 days a year in Spain or he WILL have to pay tax here! and they can check!! Apparently its up to you to prove you havent been here any longer and if you cant they WILL take tax from you! Summat like that anyway and my husband keeps all his flight receipts

Jo


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## Buenosdiaspet (Feb 13, 2009)

I am sure Jojo is right Jaan - they can and will check how often you travel / how much time you spend in Spain, if they want to use the fact to recover taxes... and the onus will be on you to be able to prove the case you are trying to make (eg that you don't spend more than 180 days in Spain) and that could be very difficult... It's easy to sound paranoid here, but the taxman really IS out to get us all!


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## Stravinsky (Aug 12, 2007)

jaan said:


> Hmm, you may be right, i will get some tax advice then.
> However i don't think this situation is too complicated and i believe if there are gonna be some issues they should be easy to sort out. Because as i wrote before i still have all my things in Warsaw. There is my company, my office is all the time there and officially it looks like i am doing my work from there.
> 
> NIE number was needed to rent a flat, start a bank account and to connect internet. If they ask me, my official version is that im renting flat here to spend my free time here and i still live in warsaw, they won't check how often i travel and they can't track my time spent here and there.
> ...


Jaan I have a house in the UK, I have investments providing an income in the UK, I have no income at all in Spain ........ but I still have to lodge a tax return for my income here in Spain because I am a resident here.


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## jaan (Feb 10, 2009)

Well, ill discuss this with some professionals then and will let you know what they say, now we can only speculate.

But also you have to remember that actually its company thats issuing invoices and company that is paying taxes. This company belongs to me but its a polish company operating in poland (even if im away). So it's not possible that this company will pay taxes to other country than poland.

Some people i know have their company registered in Cyprus, but they work and reside all the time in poland. Taxes are lower in cyprus or something, so they are paying them there because their company is registered there. Kind of offshoring.

Thats not the big deal anyway, but of course its good to know what you stand on. There is no double taxing in EU, probably i will only have to fill some forms here.


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## jaan (Feb 10, 2009)

And really, how you think those tax people will find out how many days a year i spent in spain? Its untrackable if you don't work here. I would say that i took a train, other time i took a flight. They would have to prove me that i was here not me that i wasn't.

Poland and Spain are both in Schengen area, so i believe there is no id control when you cross the borders (not by the plane of course).


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## jojo (Sep 20, 2007)

jaan said:


> And really, how you think those tax people will find out how many days a year i spent in spain? Its untrackable if you don't work here. I would say that i took a train, other time i took a flight. They would have to prove me that i was here not me that i wasn't.
> 
> Poland and Spain are both in Schengen area, so i believe there is no id control when you cross the borders (not by the plane of course).


No you are wrong!! As far as they are concerned you live in Spain and you MUST pay spanish taxes. It is UP TO YOU to prove otherwise - NOT THEM. If you cant prove you have been in Spain for less than 180 days you will be forced to pay Schengen just means yu dont have to show your passport doesnt it??? - my husband found all this out before we moved here. He has a business in the UK and keeps all records and receipts form flights so that when the Spanish government demand taxes he can show proof that he hasnt been here for more than half a year!! It makes no difference which european country your business is in, if you live in Spain more than 180 days, you have to pay Spanish taxes apparently!

Seek legal advise

Jo


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## jojo (Sep 20, 2007)

... by the way. as you can probably tell I've spoken to my husband, who incidently had his accountant with him (who researched this point when we were planning our move) and they've confirmed that you can only stay in Spain for 183 days per year otherwise you are open to dual taxation and it is down to you to prove this.

Jo


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## jaan (Feb 10, 2009)

Yes i will get legal advice.

Yes, schengen only lets you cross the borders without id or passport control. I mentioned it, because if there would always be control then maybe it would be possible for government to check when i was getting in and getting out of spain. But now it's not possible.

Probably to avoid any unnecessary problems, the easiest way is to find out what kind of proof spanish government will accept if i will have to show that i spent more than half of year abroad (which maybe will be true in my case).

Maybe im boring to keep going with that, but JoJo, if your husband keeps all his flight receipts and those would be the prove, then it would be enough to book one flight from spain to uk and another from uk to spain 182 days later. Then you have prove.

And the last thing. This is NIE number that can get me into tax troubles, right? So when i would leave spain, should i cancel this number somehow?


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## jojo (Sep 20, 2007)

jaan said:


> Yes i will get legal advice.
> 
> Yes, schengen only lets you cross the borders without id or passport control. I mentioned it, because if there would always be control then maybe it would be possible for government to check when i was getting in and getting out of spain. But now it's not possible.
> 
> ...


I dont have all the answers Jaan, I just happened to speak with my husband on the phone while I was posting my last message. I think that at some point, you will have to fill in a tax return form in Spain and I guess you can say what you like on it - BUT, if they dont believe you, you'll have to prove what you say is true and if you dont tell the truth and they find out - it could get nasty!!!

Get some advise and post your findings on here - then we'll all know! and if you're right and my husband is wrong I wont be happy, cos then why is he spending so much time in England instead of here with me LOL!!!!!

Jo


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## Buenosdiaspet (Feb 13, 2009)

And do remember, assuming you don't generally drive between Poland and Spain (which I am sure no one would want to do on a regular basis but I could be wrong!), your passport is logged now on every flight manifest. There is no Shengen of the air - I have no idea whether tax authorities could access this information, which is obviously intended for security, but it wouldnt surprise me if they could!


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## jaan (Feb 10, 2009)

They could for sure, but probably it takes lot of effort and is expensive for them. But according to that i have found in internet, this 183 days rule, let you not fill the spanish tax declaration at all if you don't live there more than half of year. So even if you do have to fill it, doesn't mean you will have to pay something.


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## jojo (Sep 20, 2007)

jaan said:


> They could for sure, but probably it takes lot of effort and is expensive for them. But according to that i have found in internet, this 183 days rule, let you not fill the spanish tax declaration at all if you don't live there more than half of year. So even if you do have to fill it, doesn't mean you will have to pay something.


GET LEGAL ADVISE! A forum or the internet is not the place to get concrete evidence. If you are wrong, it will not help your defense to say that you believed what you read on the internet!!! 

I know that my husbands accountant spent a lot of time looking into this - you should do the same.

Make sure you tell us what you find tho 

Jo xx


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## jaan (Feb 10, 2009)

Yes, as i said I WILL GET LEGAL ADVICE. But not on saturday evening  so meanwhile it doesn't hurt to think, talk or get through the internet.


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## jojo (Sep 20, 2007)

My husband is here now and says if you are a fiscal resident here - in otherwords you have an NIE number, property/rental agreement and bank status and account that you are using here, then you will be liable to pay spanish taxes on ANY money you bring into Spain. Unlike the UK, poland doesnt have a reciprical tax agreement - so for us, we can choose which country we pay tax in (I think I've got that bit right??), I dont think you can?????. However, the authorities may not find you????? But the banks do comply with them with regards to money coming in and going out. Money coming in, if its over a certain ammount, as I say, can be subject to wealth tax, even I have to worry a bit about that cos I get "housekeeping" money going into my own name account and I'm here full time, but we have spoken to the bank and they're aware of our situation and I also run a sterling account here and a UK bank account and "juggle" my money around - if I have it long enough LOL?????

I'm sorry if this is a bit garbled, I'm just relaying what my husband has told me on the drive back from the airport, but I think I've got the facts straight????

Jo


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## jaan (Feb 10, 2009)

Hehe, its interesting.

I don't exactly know what you mean by "reciprical tax agreement" but what i know is that poland has tax agreement with Spain about avoiding double taxing, so if some money are taxed in one country they can't be taxed in the second one again. So for sure its not possible that i will pay double tax for anything but it is possible that spain will want some tax for something, i will have to pay and then get money back from polish tax office, and this is the worst, because it means lot of troubles.

So you say they will tax all my money that comes to my spanish account? Thats good to know. Then its just better to take money from bank machines from my polish account than transfer them to spanish one.

Also as i lived in Germany i still have german bank account. I had some loan on it and till now some money comes there, some goes but i don't have to report it or pay tax in germany. It seems that Spain has some strict, lazy rules


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## jaan (Feb 10, 2009)

Ok. I have read the whole agreement between poland and spain and there are few points that apply to my situation.

First of all there are rules that let them qualify you as tax payer in poland or tax payer in spain:

1. You are qualified as spanish/polish taxpayer depending on a place where you actually live.
If you live in both places then it depends on which country you have tighter economic and personal bounds.

2. If it's not possible to say in which country you have tighter bonds then it depends on where you are usually staying.

3. If you are staying in both countries or non of those two countries then it depends on which country you are citizen of.

---------
Thats for personal taxes, there are many other rules for specific cases, especially if you are property owner.

As i run my own company, the next important rules for me are those that apply to companies. 

1. The income of the company can only be tax in the country where this company operates.

2. If the company has a department (with official office) in the second country, then income generated by this department is taxed in this country.

---------

The last rule that i might be interested in is for freelancers:

1. If you are freelancer you have to pay taxes in the country where you live unless you run company that is in other country.


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## jojo (Sep 20, 2007)

jaan said:


> Ok. I have read the whole agreement between poland and spain and there are few points that apply to my situation.
> 
> First of all there are rules that let them qualify you as tax payer in poland or tax payer in spain:
> 
> ...


This applies to company tax and I thought you were talking about personal "wealth" tax - the money you have to spend in Spain, the Spanish will want to tax you on it.


I guess the bottom line is you wish to avoid paying any taxes here and to do that you have to find "other" ways which maybe you should keep to yourself for fear of being caught.

Does anyone else here have any opinions or advise, I'm no expert?????????????????????

Jo


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## jaan (Feb 10, 2009)

Actually i don't try to avoid paying taxes, only try to avoid some complicated procedures, taxes height is similar in poland and spain so there wont be situation where i would have to pay lot more.

But its good that you said here that i should get some legal advice because maybe i wouldn't even think about tax issues at all and then i could have some problem at the end of the year. Now as i am here only 2 weeks i can find out everything and then will know what to do, because maybe there are some things that i shuld keep in mind, like for example not to keep money on spanish account and only transfere there as much as i need.


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## graemeboro (Oct 17, 2007)

Thanks everyone, I shall certainly clarify the situation professionally and let you know.

Thanks in advance.


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