# Self-employed in Spain



## Rich M (Jan 24, 2016)

My partner are planning to move out to Spain in a few years when she reaches early retirement. I am self-employed, and could conceivably oversee my business online while an employee handles the day to day affairs.

I dare this question has been asked many times, but a search brings up an awful lot of results - obviously we will become tax resident after six months, so will I then have to pay social security as well as tax and VAT on anything made by my business over in the UK ?

And could it possibly benefit me to make the company a limited one with myself as a director rather than just a sole trader ?


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## Rich M (Jan 24, 2016)

No self employed people out there ?


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## snikpoh (Nov 19, 2007)

Rich M said:


> My partner are planning to move out to Spain in a few years when she reaches early retirement. I am self-employed, and could conceivably oversee my business online while an employee handles the day to day affairs.
> 
> I dare this question has been asked many times, but a search brings up an awful lot of results - obviously we will become tax resident after six months, so will I then have to pay social security as well as tax and VAT on anything made by my business over in the UK ?
> 
> And could it possibly benefit me to make the company a limited one with myself as a director rather than just a sole trader ?


Yes, you automatically become tax resident after 183 days but you could be deemed tax resident before that (especially if you are working from Spain). Spanish tax is on all world-wide income.

If you live in Spain whether you work here or in UK and no matter who your customers are, you will have to be either employed here or be self-employed.

This will mean paying SS, tax and possibly VAT in Spain. Any tax paid in UK can be offset on your tax return here.


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## AllHeart (Nov 22, 2013)

Here you go, Rich. There's tons of information on being self-employed (autonomo):

Advoco : Free Advice Centre


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## Rich M (Jan 24, 2016)

Ah, thank you for that - I'm thinking I may have to make the company a limited one now...


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## snikpoh (Nov 19, 2007)

Rich M said:


> Ah, thank you for that - I'm thinking I may have to make the company a limited one now...


Really, ... and then open a Spanish branch?

It doesn't really make any difference to where you'll have to pay your tax though.


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## Rich M (Jan 24, 2016)

I realize it doesn't make any difference tax-wise, as I will have to pay Spanish tax, but I would no longer be self-employed, and so not liable for autonomo as I understand it, as I would then be an employee of the limited company. 

I will be paying for private Medical Insurance and have my own private pension anyway when I will need it.

There's no reason to open a Spanish branch of my business, as all business will be conducted through my office in the UK.


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## snikpoh (Nov 19, 2007)

Rich M said:


> I realize it doesn't make any difference tax-wise, as I will have to pay Spanish tax, but I would no longer be self-employed, and so not liable for autonomo as I understand it, as I would then be an employee of the limited company.
> 
> I will be paying for private Medical Insurance and have my own private pension anyway when I will need it.
> 
> There's no reason to open a Spanish branch of my business, as all business will be conducted through my office in the UK.


As I understand it, the only way to do that is to be self-employed in Spain and then bill the UK company for your services.

Again, as I understand it, even as an employee of a UK company, as you're working here, someone needs to make the SS payments (in Spain).

See http://www.hmrc.gov.uk/cnr/hmrc6.pdf Section 10.4

Also;



> You must pay your taxes in Spain. You also need to think about employment contracts and Spanish social security contributions
> 
> <Fred> is employed soley by a UK company now and lives in Spain. The only way to do this is:
> 1. You hire an administrator to pay social security contributions on the companies behalf and declare the company as having no physical presence in Spain. You wont have to declare annual accounts but this will still cost around 300 euros per month in admin fees, plus the social security contributions
> ...


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## Rich M (Jan 24, 2016)

Very interesting, thanks for that. I know nothing about Spanish employment laws (obviously), and I've only just heard that Spanish SS payments have to be made come what may, so I take it from what you have said that these are mandatory. 

I heard from another source that they weren't necessary if you were working for a UK limited company, but obviously this is not true, and, as you've now educated me, it would just be easier to go the autonomo route.

I'm very grateful to you for taking the time.

I assume therefore that private medical insurance would be unnecessary and my contributions would result in a small Spanish pension eventually ?


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## AllHeart (Nov 22, 2013)

Rich M said:


> Very interesting, thanks for that. I know nothing about Spanish employment laws (obviously), and I've only just heard that Spanish SS payments have to be made come what may, so I take it from what you have said that these are mandatory.
> 
> I heard from another source that they weren't necessary if you were working for a UK limited company, but obviously this is not true, and, as you've now educated me, it would just be easier to go the autonomo route.
> 
> ...


You need private medical insurance for a year before qualifying for the public healthcare in Spain.

You need to contribute for a minimum of 15 years through work in Spain to qualify for Spanish pension.

_"Anyone retiring without having made the minimum of 15 years of pension contributions will get the bare minimum "welfare" pension which is currently set at 340€ a month (but paid 14 times a year so annually 4,756€ a year)."_

From here (from the link I gave you before): Spanish pension benefits

I'm not sure, but I think the retirement age has recently changed from 65 to 67.


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## AllHeart (Nov 22, 2013)

Here's info on healthcare in Spain for Brits:

https://www.gov.uk/guidance/healthcare-in-spain


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## Rich M (Jan 24, 2016)

Thanks for that - by the time I've paid in for 15 years, I'll be well over 67.

My partner will be in receipt of a NHS pension - will this and her modest interest on savings be subject to income tax ?

And I assume she will have to have private medical insurance as she won't be working at all.


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## AllHeart (Nov 22, 2013)

Yes, she needs medical insurance. Yes, if she's a resident of Spain, she has to pay taxes on her pension in Spain and the UK. Here's some general info that might help:

https://www.gov.uk/guidance/living-in-spain


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## Rich M (Jan 24, 2016)

Great stuff - many thanks to everyone for their input, it all makes a lot more sense now.


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