# tax Spain trading



## qwertyjjj (Jan 27, 2010)

In the UK, I trade for a living, which is tax free. I would like to keep this status but also spend as little time in the UK as possible. I believe the rule is 90 days in the UK to retain tax resident status though I have also heard 183 days mentioned.
If I move to Ibiza, as long as I remain there for less than 183 days, I am told I do not become tax resident in Spain. However, would trading be classed as a contracted employment? It is self employment after all.


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## MRVT (May 17, 2008)

qwertyjjj said:


> In the UK, I trade for a living, which is tax free. I would like to keep this status but also spend as little time in the UK as possible. I believe the rule is 90 days in the UK to retain tax resident status though I have also heard 183 days mentioned.
> If I move to Ibiza, as long as I remain there for less than 183 days, I am told I do not become tax resident in Spain. However, would trading be classed as a contracted employment? It is self employment after all.


Lol, How many differing opinions are you after on how many different forums?


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## qwertyjjj (Jan 27, 2010)

MRVT said:


> Lol, How many differing opinions are you after on how many different forums?


Pretty much every expat forum to do with Spain. 
Differeing opinions is the way to research it and there might be people who have done similar


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## xabiaxica (Jun 23, 2009)

qwertyjjj said:


> Pretty much every expat forum to do with Spain.
> Differeing opinions is the way to research it and there might be people who have done similar


lay opinions are not legal/financial advice

which I think is what _you really_ need


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## lynn (Sep 25, 2008)

There is a difference between residence in a country, and tax resident in a country, and the rules are very complex and grey. Don't assume that because you 'count' your days in one country or another, you will be able to avoid tax in that country. For tax purposes, the authorities take other factors into account to determine whether you are liable for tax. We took professional advice before relocating to Spain, and I would recommend that you do too (We saw Blevins Franks). We paid for for their advice, and had the ability to go back to them to answer queries. I would strongly recommend that if you have a high net worth, you do the same. As xabiachica rightly points out, 'lay opinions are not legal/financial advice'.


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## MaidenScotland (Jun 6, 2009)

I work in Egypt.. I pay no tax because I earn my money out of the country although it is paid into a U.K account. 
I have a commercial property in the U.K which I have to pay rates etc on.
Any money earned in the U.K by a U.K citizen is liable to taxation.

Maiden


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## mrypg9 (Apr 26, 2008)

MaidenScotland said:


> I work in Egypt.. I pay no tax because I earn my money out of the country although it is paid into a U.K account.
> I have a commercial property in the U.K which I have to pay rates etc on.
> Any money earned in the U.K by a U.K citizen is liable to taxation.
> 
> Maiden


And rightly so. When we owned a UK business we gritted our teeth and paid up. We like most other honest people are still paying high rates of tax on our investment income but when in the UK we use many services paid for out of the public purse. We are not freeloaders.
People who live and work in the UK and who deliberately avoid paying due taxes should perhaps abstain from making use of any infrastructure revenue for which comes from UK taxpayers.
If we all cheated the taxman there would be no infrastructure for us to use.
I see tax dodgers as equivalent to benefit cheats.


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## qwertyjjj (Jan 27, 2010)

mrypg9 said:


> And rightly so. When we owned a UK business we gritted our teeth and paid up. We like most other honest people are still paying high rates of tax on our investment income but when in the UK we use many services paid for out of the public purse. We are not freeloaders.
> People who live and work in the UK and who deliberately avoid paying due taxes should perhaps abstain from making use of any infrastructure revenue for which comes from UK taxpayers.
> If we all cheated the taxman there would be no infrastructure for us to use.
> I see tax dodgers as equivalent to benefit cheats.


I have to disagree with you there. There is a difference between tax dodging illegally and legally playing the rules. You assume all your paid tax doesn't go to line the pockets of some dodgy people along the way, which is not the case.
Play the rules until the rules change  - that's common sense.


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## mrypg9 (Apr 26, 2008)

qwertyjjj said:


> I have to disagree with you there. There is a difference between tax dodging illegally and legally playing the rules. You assume all your paid tax doesn't go to line the pockets of some dodgy people along the way, which is not the case.
> Play the rules until the rules change  - that's common sense.


If you abide by the rules you aren't 'dodging'. Any 'dodging' outside the rules is illegal and as I said akin to benefit cheating. No reputable accountant or lawyer will advise or assist you to do anything which falls outside legitimate business practice.
We owned two medium-sized businesses and for us our reputation was of paramount importance, both for attracting a loyal customer base and for recruiting reliable workers. We did not wish to be known as the 'dodgy' company. For instance, we were often offered cash payments in consideration for waiving VAT - something we never did. In my view, if you can't make enough money to pay your taxes, you probably shouldn't be in business.

I don't understand what you meant when you talked of your paid tax 'lining somebody's pockets'. Are you implying that corrupt practices are commonplace among the ranks of HMCR?
I can think of some countries where I would assume that to be highly probable but I have had no reason to think that the probity of the UK taxman was any less than ours as businesspeople.


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## Stravinsky (Aug 12, 2007)

MaidenScotland said:


> nt.
> I have a commercial property in the U.K which I have to pay rates etc on.
> Any money earned in the U.K by a U.K citizen is liable to taxation.
> 
> Maiden


I'm afraid thats not quite the case. I'm a UK Citizen, but I am a Spanish resident. Income earned by me in the UK is taxed here in Spain, not the UK. Property rentals are a little different, unless you register in a particular way, and may be taken at source before you get your rental income, but I believe you can change that by de registering for tax in the UK totally.

On the subject of taxes, I ran a £4.5 million turnover business in the UK and we made every effort we possibly could to avoid paying taxes whenever we could. Thats not to say we did anything illegal at all, we just played the system. When you are paying 40% tax you make sure you do what you can to protect your wealth!

EDIT:
My wife used to work for H M Customs Investigation Division, and I can assure you the chances of being a bent revenue collector in the UK are about zero


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## qwertyjjj (Jan 27, 2010)

Stravinsky said:


> I'm afraid thats not quite the case. I'm a UK Citizen, but I am a Spanish resident. Income earned by me in the UK is taxed here in Spain, not the UK. Property rentals are a little different, unless you register in a particular way, and may be taken at source before you get your rental income, but I believe you can change that by de registering for tax in the UK totally.
> 
> On the subject of taxes, I ran a £4.5 million turnover business in the UK and we made every effort we possibly could to avoid paying taxes whenever we could. Thats not to say we did anything illegal at all, we just played the system. When you are paying 40% tax you make sure you do what you can to protect your wealth!
> 
> ...


Yes, worldwide income is usually taxed depending on where you are resident.
But is residency in SPain only determined by the 183 day rule or the fact that you are working there...and then is self employment in the UK classed as working in SPain? Say you ran a UK website business but just lived in Spain for 182 days only but you manage your website remotely from Spain. I will check the solicitor link above - seems good.

I never suggested the revenue inspectors were corrupt...just the people they do work for above that, not to mention mis management by politicians  
Playing the tax rules is fine.


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## Stravinsky (Aug 12, 2007)

qwertyjjj said:


> Yes, worldwide income is usually taxed depending on where you are resident.
> But is residency in SPain only determined by the 183 day rule or the fact that you are working there...and then is self employment in the UK classed as working in SPain? Say you ran a UK website business but just lived in Spain for 182 days only but you manage your website remotely from Spain. I will check the solicitor link above - seems good.
> 
> I never sugg


Its complicated
But in theory you can be tax resident in the Uk and Spain at the same time. I wouldnt even attempt to second guess how this would work in reality.

Im just trying to take over a web based UK business myself. Have you actually checked which country its better for you to be taxed in. Do you know the allowances in each country etc?


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## qwertyjjj (Jan 27, 2010)

Stravinsky said:


> Its complicated
> But in theory you can be tax resident in the Uk and Spain at the same time. I wouldnt even attempt to second guess how this would work in reality.
> 
> Im just trying to take over a web based UK business myself. Have you actually checked which country its better for you to be taxed in. Do you know the allowances in each country etc?


The web business was just an example for self employed people.
I trade tax free in the UK and/or tax reduced for CFDs, which is why I want to keep residency in the UK.


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## Stravinsky (Aug 12, 2007)

qwertyjjj said:


> The web business was just an example for self employed people.
> I trade tax free in the UK and/or tax reduced for CFDs, which is why I want to keep residency in the UK.


Yes, sorry I forgot .... in which case we have come full circle. When you arrive in Spain with the intent to reside you are supposed to take residency here 

Its the same as tax free lump sums on pensions. If you move here, they aint tax free any more


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## MaidenScotland (Jun 6, 2009)

If you are classed as a resident in the Uk then you are liable to tax if you are earning money in the UK.
I am not classed by the tax man as a resident as I work overseas and I earn my money from a foreign country.


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## Stravinsky (Aug 12, 2007)

MaidenScotland said:


> If you are classed as a resident in the Uk then you are liable to tax if you are earning money in the UK.
> I am not classed by the tax man as a resident as I work overseas and I earn my money from a foreign country.



Yes, thats what I said 
I thought you were saying that a UK citizen was taxed in the UK even if he lived abroad, I misunderstood sorry


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## qwertyjjj (Jan 27, 2010)

Stravinsky said:


> Yes, sorry I forgot .... in which case we have come full circle. When you arrive in Spain with the intent to reside you are supposed to take residency here
> 
> Its the same as tax free lump sums on pensions. If you move here, they aint tax free any more


Intent to reside is what though  ?
As far as I understand it means living for more than 183 days or is it just living there in a rented flat?



MaidenScotland said:


> If you are classed as a resident in the Uk then you are liable to tax if you are earning money in the UK.
> I am not classed by the tax man as a resident as I work overseas and I earn my money from a foreign country.


I'm clarifying this with HMRC but there is some confusion over whether it is 183 days or 91 days. They seem to have both rules.


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## Stravinsky (Aug 12, 2007)

qwertyjjj said:


> Intent to reside is what though  ?
> As far as I understand it means living for more than 183 days or is it just living there in a rented flat?
> 
> 
> ...


You'd have to argue your point with the authorities on tax residence I guess  I suspect a long term rental contract might be a pointer for them. Living here for that long you would have to register on the register of foreigners anyway which you have to do in 30 days.

I dont think you're going to get the answer here that you want. Things work here differently to the UK. When the authorities get into you, the onus will be on you to prove your point. Same with the illegal cars. They take them away from you and then you have to make them believe that you are in the right .... guilty until proved innocent.


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## mrypg9 (Apr 26, 2008)

Stravinsky said:


> I'm afraid thats not quite the case. I'm a UK Citizen, but I am a Spanish resident. Income earned by me in the UK is taxed here in Spain, not the UK. Property rentals are a little different, unless you register in a particular way, and may be taken at source before you get your rental income, but I believe you can change that by de registering for tax in the UK totally.
> 
> On the subject of taxes, I ran a £4.5 million turnover business in the UK and we made every effort we possibly could to avoid paying taxes whenever we could. Thats not to say we did anything illegal at all, we just played the system. When you are paying 40% tax you make sure you do what you can to protect your wealth!
> 
> ...


That's what I have always assumed. We take honesty of public officials for granted and our trust is rarely betrayed. (MPs and Peers are a different matter)
Of course we never paid more tax than we had to - which responsible person does? -but I can say hand on heart that we never tried to avoid paying tax which was correctly levelled on our business activities.
Incidentally, on the subject of paying UK tax whilst resident in Spain: there are some forms of income which are subject to Double Taxation Agreements and on which tax is paid only in the UK.


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## qwertyjjj (Jan 27, 2010)

Stravinsky said:


> You'd have to argue your point with the authorities on tax residence I guess  I suspect a long term rental contract might be a pointer for them. Living here for that long you would have to register on the register of foreigners anyway which you have to do in 30 days.
> 
> I dont think you're going to get the answer here that you want. Things work here differently to the UK. When the authorities get into you, the onus will be on you to prove your point. Same with the illegal cars. They take them away from you and then you have to make them believe that you are in the right .... guilty until proved innocent.


On a slight off topic. Can you have a UK car in Spain or do you have to pay Spanish road tax or is that linked to residency?
I thin the logistics of it would mean buying a car in Spain anyway because of petrol costs to drive to Spain.
Also, is there a communal car scheme in Ibiza? I know some exist in other countries but the Ibiza popn. might not be enough to warrant it.


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## Stravinsky (Aug 12, 2007)

qwertyjjj said:


> On a slight off topic. Can you have a UK car in Spain or do you have to pay Spanish road tax or is that linked to residency?
> I thin the logistics of it would mean buying a car in Spain anyway because of petrol costs to drive to Spain.
> Also, is there a communal car scheme in Ibiza? I know some exist in other countries but the Ibiza popn. might not be enough to warrant it.


Well, as I say, you're not going to get the answer you want

If you move here and you are living here then you are residing here. Therefore you have to register. As soon as you register you are not allowed to drive a UK registered car here, and you have to matriculate it to Spanish plates and then pay Spanish road tax.

If you are a holiday home owner you can keep a UK registered car here as long as it is not used for more than 6 months every year, and it has to be fully legal in the country of registration, i.e. MOT and road tax and you have to find an insurer that is happy to insure it.


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## qwertyjjj (Jan 27, 2010)

Stravinsky said:


> Well, as I say, you're not going to get the answer you want
> 
> If you move here and you are living here then you are residing here. Therefore you have to register. As soon as you register you are not allowed to drive a UK registered car here, and you have to matriculate it to Spanish plates and then pay Spanish road tax.
> 
> If you are a holiday home owner you can keep a UK registered car here as long as it is not used for more than 6 months every year, and it has to be fully legal in the country of registration, i.e. MOT and road tax and you have to find an insurer that is happy to insure it.


Aren't holiday home owners living in Spain even if it's 6 months?
An interesting classification between residing and holidaying...


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## Tallulah (Feb 16, 2009)

qwertyjjj said:


> Aren't holiday home owners living in Spain even if it's 6 months?
> An interesting classification between residing and holidaying...


I really don't understand the confusion on the issue. In fact, it's so straightforward at root level that I don't believe there can be confusion - there's just wishful thinking and "best suits" analysis. More than 183 days in any one year and you have to be resident or you're breaking the laws. Less than 183 days, you go back and don't come back in that 365 days period, and you're not breaking the law. What's confusing about that?!


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## qwertyjjj (Jan 27, 2010)

Tallulah said:


> I really don't understand the confusion on the issue. In fact, it's so straightforward at root level that I don't believe there can be confusion - there's just wishful thinking and "best suits" analysis. More than 183 days in any one year and you have to be resident or you're breaking the laws. Less than 183 days, you go back and don't come back in that 365 days period, and you're not breaking the law. What's confusing about that?!


That's exactly what I thought but the post has many mentioned of the fact that the Spanish could class you as resident if you live there - maybe some confusion over what the authorities can actually do.
183 seems to be the legally proven amount.


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