# Self Employed & double taxation treaty



## FastEddyFelson (Aug 19, 2013)

Does anyone know how this would work for self employed or autonomo, considered to be tax resident in UK (April 2013/4 and Spain 2013, considering the UK returns will be done after the Spanish returns?

Would the amount have to be paid twice, and then recouped from the Spanish government? Or could the tax paid to the Spanish government be offset against tax owed to the UK?

I had a look through the threads and found information about the DTA, but nothing specifically about self employed. 

Thanks


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## CapnBilly (Jun 7, 2011)

FastEddyFelson said:


> Does anyone know how this would work for self employed or autonomo, considered to be tax resident in UK (April 2013/4 and Spain 2013, considering the UK returns will be done after the Spanish returns?
> 
> Would the amount have to be paid twice, and then recouped from the Spanish government? Or could the tax paid to the Spanish government be offset against tax owed to the UK?
> 
> ...


I think you should read the Double Taxation Agreement for guidance. This is a link to the existing DTA http://www.hmrc.gov.uk/taxtreaties/in-force/spain-uk-dtc.pdf, but note a new one has been signed, but is not yet in force. You can find that here http://www.hmrc.gov.uk/taxtreaties/signed/spain-uk-protocol.pdf. As far as I recall from your previous posts you earn your income as an author. I think this is specifically covered in the old agreement (Article 14), but interestingly not in the new one, but I would think it comes under Other Income (Article 20). It says that the income is only taxable in the state in which you are resident, so this may be a bit complicated. Probably worth giving HMRC a call. You definitely won't pay twice, but if I had a choice I would definitely prefer to obtain a refund from HMRC, but you may not have a choice.


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## FastEddyFelson (Aug 19, 2013)

Thanks CapnBilly. I think the thing that complicates it is that the UK tax returns will be done after the Spanish ones, and as much as I can understand by what I've read, I can offset what I've paid in England against what they want me to pay in Spain, but not the other way round. When I phoned HMRC, the guy I spoke to told me to have a look at the DTA for guidance and said he couldn't comment about the situation in Spain, which clearly doesn't help much. I think I'll try again tomorrow.


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## CapnBilly (Jun 7, 2011)

FastEddyFelson said:


> Thanks CapnBilly. I think the thing that complicates it is that the UK tax returns will be done after the Spanish ones, and as much as I can understand by what I've read, I can offset what I've paid in England against what they want me to pay in Spain, but not the other way round. When I phoned HMRC, the guy I spoke to told me to have a look at the DTA for guidance and said he couldn't comment about the situation in Spain, which clearly doesn't help much. I think I'll try again tomorrow.


 I don't think that's the issue you should be asking HMRC about. Firstly, if I was you I would ask to say to a technician about the SRT and/or DTA. These are the "experts" who can properly advise you, and not tell you to read the DTA. With regard to that, it's pretty clear in Article 24 that you can offset any Spanish tax against UK tax payable.

However, I read your first post, and from the n formation in there, I'm not clear that you would be a resident. I think you probably fail the 3 overseas tests, and the first 2 UK tests. However, I wonder whether you also fail the 3 rd UK test. Even if you do, with the number of days you will spend in the UK this tax year, you would need at least 3/4 ties. I'm not absolutely clear from your info, but that's a quite a lot.

So, if I was you, I would be asking them for advice on whether you are a UK resident. I would firstly read through the SRT and work out what you think, and then ask to speak to a technician. If you show a bit of knowledge, they soon pass you on.

Having said all that, even if you are resident in the UK, you are definitely resident in Spain, and, as I posted before, your income is taxable only in the country where you are a resident, so I'm not clear that you should declare and pay in both, even if you can offset.


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## zenkarma (Feb 15, 2013)

FastEddyFelson said:


> I think the thing that complicates it is that the UK tax returns will be done after the Spanish ones, and as much as I can understand by what I've read, I can offset what I've paid in England against what they want me to pay in Spain, but not the other way round.


Why not?

You can only be a tax resident in one country at a time. If you've lived in the UK and move to Spain and become tax resident there and you're liable for UK tax, you can offset it against what the Spanish want to you pay. And vice versa. You do not pay the same tax to both countries.


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## FastEddyFelson (Aug 19, 2013)

Again, thanks CapnBilly. On the SRT, it's complicated, but as the tax year hasn't finished yet, I could change my working pattern and spend more days in the UK and fulfil the criteria as a uk tax resident more easily, if it is more suitable for me from a tax perspective. As residency in both countries is a possibility, it's important for me then to understand my obligations in both countries, especially with regard to self employment, as I understand autonomos file tax returns more regularly than employees.


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## FastEddyFelson (Aug 19, 2013)

zenkarma said:


> Why not?
> 
> You can only be a tax resident in one country at a time. If you've lived in the UK and move to Spain and become tax resident there and you're liable for UK tax, you can offset it against what the Spanish want to you pay. And vice versa. You do not pay the same tax to both countries.


I think I read this somewhere, but I can't be sure now. I expect it will come down to the SRT. If I'm deemed UK resident then it seems to make sense that I can offset the tax paid there against Spain, but not the other way round. If I'm not deemed UK resident, it doesn't matter anyway. Does that make sense? I guess it'sa question for HRMC.


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## NickZ (Jun 26, 2009)

You basically pay taxes in the country that you are tax resident in.

Start with that idea.

If you earn income in a second /third/etc country depending on the type of income you may have to pay taxes in that country.

Depending on the type of income it may not be taxed in your home country. It may be taxed at a higher rate. It may be taxed at a lower rate. All these things complicate the issue.

Finally each country can in theory have their own rules for tax residency. So you can from the point of view of the different countries be resident in more then one country. IF this happens you need to look at the tax treaty tie breakers. I think article 4. While it's possible in theory to be tied after the tie breakers I can't imagine a human being not being covered by the tie breakers.


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