Tax returns

Started by MaureenG, June 03, 2014, 14:26:06 PM

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MaureenG

I understand that the tax-free personal allowance in Spain is just over 5000 euros per annum. If I have a part-time job paying this amount or less per annum, will I have to file a tax return? What about if I am "autonomo" and earning less than the personal allowance?

Also, does anyone know if it is legal to be employed by a business in Spain and not have a proper contract, where your NI is paid by the employer?

SheilaW

If you're autonomo then there are two possibilities, AFAIK.
If (like me) a significant percentage of your income does NOT come from registered Spanish businesses: then you make a declaration every three months and pay tax very soon afterwards. When you make the final, annual declaration, they tell you how much more you owe them, or how much they owe you. They probably want to be paid more or less immediately, but if they owe you then you have to wait a good six months for it >:(.
The thing is that whenever you invoice a Spanish company, you only actually invoice them for 79% of the total! Your client pays the other 21% directly to the government as your tax contribution. Sneaky, eh? If most of your income is pre-taxed in this way you don't have to pay anything else until the end of the year, when the same thing applies - more payment or refund.
I suppose if you earned less than 5k then they'd return all tax paid. HOWEVER, it's illegal for a foreigner to set up as an autonomo just to get state benefits. You have to really run a business. They gave me the third degree about how much I expected to earn, how much experience I had etc. when I went for residencia. I would imagine 5k would be OK though - they just want to stop people setting up as autonomo and then earning nothing but qualifying themselves, their partner, 6+ kids and various adult disabled dependants for state benefits.

Don't know what happens if you have a job, but if you don't have a contract then there's no way your employer will be paying NI, is there? You won't have any cover at all. Unless there's something I'm not aware of.

MaureenG

Thanks for the info Sheila. I don't know what I'm going to be doing yet - I'm still exploring all the options. I don't really want to be "autonomo" as it seems too complicated. Also I'm not intending to try and get state healthcare without contributing - if I can't get an employment contract with NI paid, I'll take out a private health insurance policy.

One thing I have considered is working online for a company in another EU country (e.g. Germany). In this case, the German company would invoice the clients and then pay me a salary. I assume I would then pay tax in Spain only under the EU "double taxation" agreement and be required to file a tax return annually?

Also, do pensioners have to file tax returns?

I used to work in the field of Accounting & Finance in the UK but don't have any experience of taxation in / between other EU countries. Maybe I should take a course in EU accounting policies? Or maybe it'll be easier just to get a Spanish accountant!

SheilaW

Quote from: MaureenG on June 03, 2014, 20:47:39 PM
I don't really want to be "autonomo" as it seems too complicated.
If you are happy doing the work, and happy with the income, it isn't complicated at all. I pay my accountant 35€ a month and I visit him once a quarter with my invoices and my expenses (phone bills, receipts for stationery, anything to do with my computer, petrol...), then he tells me what tax bills to expect and I pay them.
QuoteOne thing I have considered is working online for a company in another EU country (e.g. Germany). In this case, the German company would invoice the clients and then pay me a salary. I assume I would then pay tax in Spain only under the EU "double taxation" agreement and be required to file a tax return annually?
Goodness knows where that would leave you! You'd be paying German levels of tax - don't know how high they are - and you'd be paying into the German social security system without being able to make use of it. You'd qualify for a German pension too and if you never worked here then you'd have to claim your pension from Germany, even if most of it was due from the UK. It's the last country you worked for who get to organise it all. On the face of it, it seems far from the simpler option.

But I'm no expert, and I guess that's what you need.