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Working Remotely for another company in another country

Last activity 28 March 2024 by gwynj

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MadEngineerLT
Hello, I am a software engineer and I plan to move to Spain from another EU country. I might work there locally for a year or so but then I would like to work for a better paying country like Germany or Switzerland remotely since Spanish salaries are meh. How is it done exactly? Do I need to apply for some sort of self employed or freelance status for me to accept an offer from Germany? What kind of taxes do I pay and how do I avoid double taxation.
MadEngineerLT
Anyone working remotely?
Rosie_M
Hi mad engineer,

I'm looking into this as well, what nationality are you? 

I'm British so now treated as a 3rd world citizen (thanks Brexit!) so it's made things much more complex but not impossible - I have seen people posting about the 5 year non-lucrative visa, but you have to provide proof that you have around 27,000 euros of funds in the 1st year to support yourself.. it's complex but worth looking into. 

Spain are also rumoured to be publishing a new "digital nomad visa" for people who can work and live in Spain for up to 1 year and re-new for up to another 2 years. The exact details haven't been published yet, I think they are due in September but you can google it to find out more. 

Also, look for the "Digital Nomad Embassy" on facebook, they have lots of information about all of the countries that already have the nomad visas, there are other sites too so you can start to build up a network before you travel. 

Good luck! 
MadEngineerLT
I am from Lithuania so I don't have much trouble moving to Spain.
gwynj
Greetings @MadEngineerLT and welcome to the expat.com forum!

As you are from Lithuania you are an EU citizen, so you can move to any EU country, whether to work, study, or hang out on the beach. This is the EU's "freedom of movement".

Even so, there are some immigration formalities as the EU asks you to register in your new country. It's usually not difficult, and typically involves providing (for your new country) proof of address, proof of health insurance, and proof of funds/income.

Given this, it's no problem to move to any EU country... and it's no problem to work for any EU employer, whether you work in person or remotely. A German employer might want to verify your EU citizenship (i.e. your right to work) rather than your autonomo status in Spain. However, some might be concerned that you are paying tax on your income, so they could ask about your tax status, or require that you invoice them from a limited company (for which you'd have to file accounts).

Normally double taxation is not an issue.

Tax residence has different rules, but the most common/standard is the "substantial presence test" of 183 days or more (i.e. more than half the year). There might be some exit conditions on your current tax residence country, but I doubt this is an issue in Lithuania.

This means that a simple way of enjoying Europe is to keep your home/tax base in Lithuania, and then keep your physical stays in Spain, Germany or Bulgaria to less than than the 183 days. Or you can transfer it (and yourself) to Spain, or even Bulgaria (because of the low tax rates).

You can typically be an employee, or self-employed (autonomo in Spain), or utilize your own consulting company. You don't need multiple companies, it can be incorporated (and VAT registered, if you make a lot of money) in Lithuania, or Spain, or Ireland, or Bulgaria. Ireland and Bulgaria have very favourable corporate taxes. Not exactly freedom of movement, I think it's called freedom of establishment and freedom to provide services (but it has the same effect, just for companies and trade, rather than people.)

If you love Spain and you want to live in Spain, probably the least hassle is to register as a Spanish autonomo, or incorporate a Spanish company. And pay tax on Spain or your income whether from work in Spain, or work in Germany.

If you are a high-flying tech wizard, and you will make lots of money, and you just want to experience different places, and minimize your tax burden, then Bulgarian (or Ireland) residence, coupled with a Bulgarian (or Irish) limited company would help you do this. As long as you keep your stays in other EU countries below the 183 days.

Opinions differ about self-employed vs. company, and depends on level of income and the country's tax rules. But many folks like a company because it's more portable than self-employment, and you can include a lot of expenses (maybe car, maybe travel, maybe hardware,  maybe internet/mobile plan, maybe salary, maybe pension contributions, maybe website/marketing, etc. etc.) which are applied against your invoiced income, and hence lower your profits/tax bill.

In my case, I have legal residence in Bulgaria, Cyprus and Spain. But my tax base is in Bulgaria and my stays in the other two (and UK) are typically less than 90 days (but up to 182 would be OK too). I suppose if pushed I would admit that I liked Spain and Cyprus better than Bulgaria, there's a lot to like about warm, beachy Mediterranean cities. But I ended up spending most of my time in Bulgaria, and I really like it a lot!

It has exceptional connectivity (100 Mbps fibre in my city apartment and my country house for less than 10 euros per month, 50 GB data card for my MiFi for about 15 euros), and it has a very low cost of living (e.g. 1 euro coffee, 3 euros water bill, 25 euros electricity bill, 5 euro apartment maintenance bill, 60 euros property tax), and very low taxation (10% flat rate). And good travel connections (Sofia to European capitals via Ryanair and Wizzair). All this makes it great for remote working with in-person visits to schmooze the boss, or spend a few weeks on a beach. It's also pretty, safe, and not very crowded. I suppose the bottom-line is that my bills are low, and income tax is low, so I need to work only a few hours a month to breakeven... and that's a pretty stress-free situation to be in. And leaves me more time to go mountain biking in the Balkan Mountains or work on my doctoral thesis... or, disappointingly, watch far too much Netflix. :-)

If I reflect on my past lives in London, Singapore and San Francisco... well, it's great to live in these upscale, cosmopolitan cities. But I always rather felt like I was on a large treadmill running to keep up, as even a full-time tech salary didn't leave much over given the very high cost of living.
MadEngineerLT

@gwynj That's quite interesting. How does legal residence work if you can have it in so many places? So if I would say move to Bulgaria for 6 months I would be tax resident there and I can then live somewhere else again as long as I return? What happens when you lose tax residence because you don't wanna come back there. How do you exactly achieve status of living in Spain and paying Bulgarian taxes?

gwynj
There are issues of legal residence (having a residence permit), physical residence (where you are/live/have a home), and tax residence (where you currently have the legal obligation to pay taxes).

Most us enjoy a simple life, so we usually have them all in the same place at the same time! :-) But, actually, they are separate and distinct.

Tax residence can be triggered by your assets or family or other rules, depending on the particular country. A few (but most don't) consider you a tax resident simply if you become legally resident (I think Serbia is an example). One (the USA) considers you a tax resident based on your (US) citizenship (or Green Card permanent residence), regardless of where you live. But the most typical one is the 183 days "substantial presence test". Hence, if you stay below this magic number, you are usually OK. (The other common one is your "centre of economic activity" which would be the country where most of your wealth is concentrated in terms of property, businesses, and other assets.)

If you stay longer (in one or more visits), then usually the country in question will consider you tax resident and want to see your tax return every year... whether you say anything to them or not.

You can move your tax residence multiple times, if you live in Lithuania for many years... then a year or two in Spain... then a year in Bulgaria... and so on. Or you can keep it in Lithuania, and keep your stays in the other countries below 182 days. Or you can relocate it to Bulgaria (if you think it has a lower tax rate), and then keep your stays in the other countries below the magic number.

However, you should note that once you have the tax residence in Lithuania or Bulgaria, you don't need to keep spending more than 183 days there, you just need to make sure your legal residence is in order, and that you file the appropriate tax returns every year. And that you keep below 182 days in any other countries. (In other words, the rules for acquiring tax residence status can be different from the rules for keeping it.)

Usually it's not terribly complicated to lose tax residence status in a country. You just move to another one, and stay there for more than 6 months. Sometimes it's more complicated than this, but for most of us that's how it would work. And usually it's no great drama: you live in Lithuania for 20 plus years and pay taxes there... then relocate to Bulgaria for a couple of years, and pay taxes there... then you get a great job in Germany for a few years and pay taxes there instead.

It's also possible to be tax resident in 2 or more countries, but it's not so common (unless you're American). Or, slightly more common is to be tax resident in one country, but have non-resident tax obligations in one or more other countries (typically because you have property or a business there, or citizenship there in the case of USA, or do some work there and get paid in that country). So, while I am not tax resident in either Cyprus or Spain, they do levy taxes on the property I own there.

As previously mentioned, in relation to your work, you can choose to make that a personal tax obligation (by being self-employed) or a corporate one (by incorporating a company). Although, of course, most likely having a company will create some personal tax obligations too, as you'd probably be an employee, or you'd want to issue yourself some dividends. Your personal tax residence doesn't have to be the same as your corporation's tax residence (which is its country of incorporation), and often isn't. However, if you choose to incorporate in a lower tax country (such as Bulgaria) it might be advantageous to also have your tax residence there too.

The sneaky thing that some folks do is to incorporate in Bulgaria (for low corporate tax) and use that for invoicing and doing business in a high tax country (such as Germany or France or Spain)... while ALSO continuing to live in that high tax country. That's a no-no.

You achieve the status of "living in Spain" by moving to Spain, and doing your EU citizen registration. If you want to live there all the time, you'll also be a Spanish tax resident. In which case, not advisable to try paying your taxes in Bulgaria. :-) I also have the status of "living in Spain", but I make sure it's for less than 183 days per year. Hence, I can continue to also be "living in Bulgaria" and being tax resident in Bulgaria.
MadEngineerLT
@gwynj How do they actually calculate how many days you have stayed in particular country, because I definitely would like to spend more than 6 months in Spain just Spanish taxes are not that friendly. I think if I am correct you end up paying about same amount of taxes as you would doing a normal job.
MadEngineerLT
Aso as far I understand if I wanted to buy a flat in Spain, then I would become tax resident there? Because I need to get that residence number or whatever.
gwynj
If you love Spain, and you want to live there (and many do, it's super country!), then you'll be living there all or most of the year... which is more than 183 days. Hence you'll be a Spanish tax resident, and you'll need to file your tax returns there. If that's the case, the easiest option is to register as an "autonomo" (self-employed). Or, if you prefer, you can work for someone as an employee, or incorporate your own company in Spain.

Perhaps Spain tax rates are "not that friendly", but that's the trade-off for all the sun, sand, sea, and paella that we all know and love. :-) If you're not happy with this trade-off, then you have to become a tax resident of a more friendly country (or stay tax resident in Lithuania), pay your taxes there, and keep your Spanish stays below the 183 days. It's pretty much an either-or type deal.

(Although, of course, some digital nomads, and Perpetual Tourists - PTs, choose a third option: they skate through life with no official tax base, and no residence permits by staying below the 90 days visa-free allowance of most countries for EU citizens.)

Getting your residence permit (or registering as an EU citizen, in your case) doesn't automatically make you a tax resident of Spain. Neither does buying a flat in Spain. To buy a flat, you'll need to get your NIE (Número de Identidad de Extranjero) first. The NIE is just an ID number, and getting one also does not make you tax resident. (But the same NIE number will appear on your residence documents, and it will be used for social security and tax.)

I got myself a NIE, and I purchased an apartment in Spain. And I've done the EU citizen registration (as this was pre-Brexit). And I've registered at the local town hall (for the padron certificate, which immigration wanted to see). So I have legal residence, and I have a home there. But as I only spend a few weeks a year there, I'm not tax resident there. As such, I'm like most foreigners who have a holiday home in Spain.

Spain (and other countries) don't typically count your days and then remind you it's time to pay your taxes. :-) As you're an EU citizen they probably won't even bother to stamp your passport when you enter/leave, so you won't even be able to take quick peek at your passport and figure it out. It's your responsibility to be aware of where you spend your life, and where your tax-paying obligations are.
MichaelGH

Great post!

I am currently in a similar situation and I see you have a lot of knowledge in this area :)


We are from Denmark and have travelled Europe for a year and now live in Spain for 10 months. I am currently tax resident in Spain, working remote for a Spanish company. We have Spanish Residency and NIE.


We own an apartment in Bulgaria but only stayed there for 3 months. During that time I created a Ltd company which my plan was, to use if I ever started freelancing.


As it looks now, we will travel east next summer to explore Asian countries and I hops to bring my remote work from Spain. They don't know this yet, and they might not allow it - I don't know.


If they would, however, I am not sure how to play this.

We would have no address in Spain, but could I keep tax residency here? Or would it be allowed to use my Bulgarian company instead?


We won't stay in any country more than 0-2 months at a time.


Do you have any wise words for this setup? 🙏🏼


Kindly, Michael

gwynj

@MichaelGH


Welcome to the expat.com forum, and have fun on your travels in 2023!


In principle, switching from a Spanish deal to a contractor-with-Bulgarian-company deal is pretty straightforward. But...


- Is your BG company ready to trade? (e.g. company bank account, accountant, VAT registration, etc.)


- Are you ready to trade using a BG company? (e.g. EU Citizen Registration, BG tax residence)


- Will raising this change scare off your employer?


- How/when can you get out of your Spanish taxpayer status?


If you're already a remote worker, I don't see much reason why they wouldn't be OK with you being a slightly-further-away-remote-worker. And maybe you don't even need to tell them?


If you're travelling for some months and then back in Spain, I'd be tempted to leave everything as is. Rather than risk disruption by discussing your travel plans and/or changing the payment instructions. If your Spanish employer continues payment as now, and they (or you) continue tax/social security payments as now, then nobody is likely to care that you're working on a beach in Bali, rather than a beach in Alicante. :-)


Bulgaria could definitely be a good option as you already have an apartment and company there, taxes are low, and the cost of living is low. But I think it's a lot more useful when you want to be a freelancer with many clients, rather than working for one company. Either way, you're already a Spanish (higher) taxpayer, so I think it's advisable to get yourself out of that... and replace with Bulgarian tax residence. This would also change your lifestyle a bit as you'd then have to avoid staying in Spain (or anywhere else) for 183 days or more.


Personally, I love Spain, and I really enjoy the culture/language/food. But I like Bulgaria too, and I enjoy living here. The taxation is lower, and the cost of living is lower, so it's a super base for a remote worker/freelancer/digital nomad. It has really grown on me, so my Spain and Cyprus visits are now down to a few weeks a year. But, you know, YMMV and all that. :-)

madeline ray

Hello ! This is such a great thread.


I am an American living in Spain (I have residency here as my boyfriend and I did pareja de hecho). I am currently working full-time for a Spanish company but want to work remotely - preferably, for an American company as the salaries are quite nice, but wondering what that looks like tax-wise/what the best approach would be?


I will be required to pay taxes in Spain as a resident and required to file in USA as a citizen. Autonomo is probably the best route, but I am not quite sure what is entailed and how that would work from an employer's standpoint if they are a US company. Do you have any insights?

Thank you!!

gwynj

@madeline ray


Welcome to the expat.com forum, and your new life in Spain. Congrats on getting your residence and a full-time job sorted out!


The basic position is exactly as you describe. Americans abroad often have a slightly more complex tax situation as they are typically tax residents of TWO countries: one by citizenship, and one by residence. But there's a double taxation agreement (DTA) between USA and Spain, so that helps.


Typically, if you have a remote client, they are not your "employer" and you are not their "employee". Instead, you invoice them for your services, either as a contractor/freelancer (= autonomo in Spain), or from your own business entity (= a Spanish corporation, or possibly a USA corporation). In the former, you make social security contributions and pay income tax based directly on this income. In the latter, you'd usually make yourself an employee of your company, which would pay the social security/income tax due on the salary you choose to pay yourself.


Are you keeping the Spanish job, and taking on some American side gigs to see how it goes? Or are you thinking of resigning and starting from scratch looking for remote clients?

madeline ray

@gwynj Hello, and thanks for the welcome and response!


I am strongly considering the autonomo route and would likely work as a contractor and invoice an American company. Do you know if this is something that could be done with a single company over a period of time? I mean, it would be as if I were an employee but technically, for tax purposes, I would be a contractor. I think this option is best as I do not plan to live in the USA ever again so do not know if I want to contribute to social security there. I have a Roth IRA that I would continue to invest in. What are your thoughts on this?


If I were to work freelance or as a contractor, how exactly would that work for me? I would invoice the client in the USA on a monthly (?) basis, pay x amount per month in Spain to cover my autonomo social security (I think?) and then would I also need to pay additional taxes on the invoice to Spain and file taxes for the invoice amounts in the USA, too? I want to ensure I have a clear picture of what is expected of me, especially if I need to consider extra monthly tax/soc security-related expenses for salary negotiations.


I am going to continue my full-time job temporarily, but ultimately, the goal is to work 100% contractor, as salaries are much more attractive in the USA than in Spain. So, then, I would only have a US client.

dohop

I'm just seeing this fabulous thread now.

I've been working for myself online for about 3 yrs already, but I'm now going to change tack and look for a remote job, working for a company.

I'm Irish & British ( i.e. N. Irish) and am also residing (renting) mostly in Spain.

I have a temp. EU residency green card - I will be residing in Spain for 5 yrs at the end 2024.

I'm tax resident and autonomo already.


Question is - with the autonomo, can I happily apply to UK, European or US companies for a job ?

Thanks in advance @gwynj and anyone else who may be able to help with this.

gwynj

@dohop


Welcome to the Expat.com forum. You should qualify for Permanent Residence in 2024, congratulations!


If you're already autonomo, and paying taxes on your income from multiple clients, then nothing should change if you merely switch to working for only one client (as long as you can invoice them in the usual way). But check, in case the client insists that you must have a limited company, or they want to treat you as an employee and deduct taxes at source.


I'm not an expert in this area at all, but I would not be surprised if a UK client wanted company invoices, or a US client was required to deduct a withholding tax from payment to a foreign person. You could carry on being autonomo, of course, but these are potential complications.


Personally, I prefer to have multiple clients rather than rely on one. But I agree that it's less of headache to have a full-time gig and a steady paycheck. :-)

dohop

@gwynj Thankyou! I’ve not worked for other clients yet, I’ve only worked for myself as autonomo (on start-ups) so have only had to report my own earnings- but now want to get a permanent job with a company.

So was hoping by being autonomo it would be easier to work for anyone anywhere if I could do the tax returns in Spain.

Am looking internationally because I prefer to work in English. My Spanish isn’t good enough to work in Spanish!

Thanks for the advice on different scenarios.

gwynj

@dohop


Autonomo is definitely one viable option. And maybe it's the best place to start, as you're already registered, and you haven't yet found the magical new client that is gonna pay you a huge salary for a couple of hours of work. :-)


It might also be worth considering a limited company as many consider them to offer some advantages over being self-employed. You also have the flexibility of choosing the jurisdiction, as you could have a US LLC, or a UK LTD, or a Spanish co, or indeed anywhere in EU (e.g. Ireland or Bulgaria as they have the lowest corporate tax rate). Further, you can be an employee of your own company, or you can invoice it as an autonomo.


I have been noodling around recently with UK limited companies. The tax rate is higher, but the UK has fabulous online services so you can do everything yourself online, including your own accounting. And you can setup your company banking online too with Wise (and others). That's quite interesting compared to many locations where you're stuck needing to pay (more) the incorporation agent or an attorney or an accounting firm for your annual accounts, and you have to go deal with a local bank.


If your future is in Spain, then maybe autonomo (or Spanish company) is the easiest way to go. If you're thinking more of a migration from own stuff to client(s) work as a freelancer, then you might also be considering switching from one location to multi-location/nomad working. If so, some kind of entity with all your accounting/banking in place  could be very useful.

KyPie

Hi All, following this thread and has a similar situation with maybe less complexity, feel like my question is almost answered, but I have some gaps!


I am permanently employed by a Dutch company, who will allow me to move to and work in Spain (and therefore register as a resident and pay my taxes in Spain, and essentially de-register from tax and residency in NL), while maintaining my employment with them full time (I am also clear mostly about the double tax treaty, and roughly this idea of Freedom of moment, and I am an EU citizen).


To be clear, I’m also not trying to count days, the aim is to be in Spain permanently.


What I am trying to understand is what stops me from moving to Spain tomorrow, for example, and declaring my tax, registering residency etc in Spain by myself? If I am free to live anywhere while being employed by another company, why is it so impossible to find this information?


The advice I received from tax consultants is that for this to be possible, a Remote/Deel type setup has to be done, or basically one in which a Labour representative office is set up for my company, which I am not clear on why this has to be done, or of it's just a service being pushed (which essentially the consultants or companies set this up, do the paper work etc, run payroll, do taxes on your behalf, etc)? Or is this something that actually has to be done because of payroll, social security etc in Spain being needed?


Surely my company could also just pay me my salary from NL and I could just pay my social security, healthcare etc? Or is it not that simple?


Thanks :)

gwynj

@KyPie


Welcome to the Expat.com forum and good luck with your move to Spain!


You certainly can move to Spain tomorrow, and continue working for your current NL company (if they've said they're happy for you to work remotely). There's absolutely nothing stopping you from doing this, if it appeals! You can rent an apartment if you want to be a remote worker, or you Airbnb it, if you fancy a bit of digital nomading.


EU citizens can relocate to any EU country thanks to "Freedom of Movement". However, you are supposed to (but are not forced to) do your "EU Citizen Registration" if you plan to stay longer than 90 days. This is the official page on what you need to do. You certainly can do it yourself without any legal help (but a translator might be useful at the immigration office, if your Spanish isn't good). You'd need proof of funds and proof of health insurance.

https://inclusion.seg-social.es/web/migraciones/w/certificado-de-registro-de-ciudadano-de-la-union-europea-hi-101-


Tax residence is separate from your legal residence/physical residence. There are two issues: when/how you gain tax residence in your new country (ES), and how you lose your current tax residence (NL). Typically, you would gain tax residence in Spain after spending 183 days there (the "substantial presence test"). I don't know the NL tax rules for how you lose your tax residence there, and until you lose it there is a chance you might have dual tax residence for a period. Giving other examples: the USA doesn't let Americans escape the tax net by relocating; the UK treats leavers as tax resident for the current tax year, and then non-resident from the next tax year (unless they're British and continue to own a home in the UK).


Separately, you have the contractual relationship between you and your employer, and the payment of your salary. You are currently an employee, so I presume they they make the appropriate deductions (for income tax, social security, health insurance, pension) and pay you net, into your NL bank account. The NL tax rules might say (for example) that employees of NL companies, or those with NL bank accounts are automatically tax residents (in which case, you would not be able to lose your NL tax residence under the current arrangement). If you own a home in NL, and they have a similar rule to the UK, then that might also stop you losing your NL tax residence.


There's certainly no issue with you keeping the situation unchanged. You just need access to your NL account while in Spain to pay your living expenses. And, once you become tax resident in Spain, and start submitting your tax returns there, there's the potential for needing to pay some tax in Spain. I don't know the exact rules, but I'm sure there's a DTA, and I'd guess they won't be that bothered by an EU citizen who's already paying all his taxes in another EU country. I really don't think you need to worry about a "Labour representative office"!


Leaving aside tax issues, it might be good to keep the current arrangement (and staying as an NL employee). Your NL pension might be excellent, and you're better off adding to it. And NL employment protections might be very strong and worth keeping. Or your company is growing, and you might feel there's more potential for promotion/pay rises as a long-term employee rather than some isolated freelancer. And you might decide after 3 months that Spain's not for you after all, and you wanna go back home. And it's the easy option too.


If you want a different arrangement, and your employer is happy to do so, then you can be an independent contractor, and your employer should be able to pay your salary gross without any deductions, to a new bank account (probably, but not necessarily, in Spain). You might even be able to haggle your salary upwards (companies have fewer costs and obligations in relation to contractors vs employees). Obviously, you'd need to write up some kind of services contract to cover this. And you'd need to decide whether to be self-employed or have your own limited company. In the former case, you'd register as an "autonomo" in Spain, and you'd then be responsible for paying your income tax and social security in Spain. In the latter case, you'd incorporate a company (most likely Spain, but could be elsewhere). Which you choose depends a lot on what your plans are in terms of physical location, and continued work for current employer and other clients.


Assuming you've been employed for a few years and you've got a great job with a great employer... my inclination would be to leave the contractual relationship and payment unchanged (i.e. still an employee of the same NL company, still receiving net salary in NL bank account). Before leaving, I'd make sure I have my NL (or LT) EHIC and that I have access to funds abroad (either from my NL account, or a new account at Wise or Revolut or some Spanish bank). Then I'd drive over to Spain, and find myself a nice rental apartment on a beach somewhere close to a big city, and see how it goes. If you think it's awesome, then definitely get your EU citizen registration done. Essentially, it's exactly as simple as you think it should be! :-)


Longer-term, then being an NL employee while living in Spain is probably not the best option. So, at some point, you should figure out the autonomo vs own company issue and make the transition.

KyPie

@gywnj, thanks so much, this is an incredibly comprehensive and awesome explanation, I really appreciate the time you have taken to go through this and write a considered answer.


For now, I would keep my current contract with current employer (not using the autónomo or company option - I’ve done the math, and it’s definitely better, but it’s the compromise I am making with the company, who is being amazing by helping support the move, and they’d prefer I stay permanently employed, and I am happy with that).


I agree that essentially the benefits with NL (retirement, healthcare etc) are definitely better, but at this stage I’m moving because I love Spain (spent a lot of time here) and it’s where I would like to give it a real shot at making a life here (instead of dipping in and out) - I’ve tried and tested for a few months at a time already :)


There is a DTA, but if I am here for more than 183 days etc, and I am working from here (even though I am employed in NL), I would have to pay tax here as far as I understand. From an NL perspective, the way the Belastingdienst explained this to me, is that when I leave NL I would have to submit a tax return answering questions to determine where I would pay tax, and those help prevent double tax (so my guess would be that there is potential someone overlap and may just result in a payback at some point).


They mentioned as well that the Dutch employer has to register in Spain in connection with employer’s’ insurance and premiums (this is where I was guessing all the tax consultants come in and why people talk about the labour rep office - and it’s something I don’t know well enough in Spanish to ask at the tax office, so maybe it’s worth getting someone to translate for me)


P.S love the advice on the beach apartment ! 😂

gwynj

@KyPie


Exactly! There's more to it than tax issues. You're one of the lucky ones with a great and supportive employer, and NL social benefits are pretty good. And if your employer has stated a preference (that you continue as a full-time employee), then it seems sensible not to rock the boat. :-)


If your employer is happy for you to work remotely, then you can get the best of both worlds, a good NL job/employer/salary and the nice Spanish lifestyle that you enjoy. Lucky you! :-)


People talk about tax a lot, and it's a serious issue. And if you want to live in Spain or Netherlands, you'll have to pay taxes. But, in reality, it's usually no big deal, and most folks simply swap one country/job for another.


If, separate from your great job, you're also very wealthy and you have lots of property and savings, then the issue of where you are tax resident can be a big deal. That's why some Dutch relocate to Cyprus or The Bahamas. In this case, losing your NL tax residence, and trying to avoid dual tax residence, and filing your tax returns in Spain could be a big deal.


If you're like many expats here, you have a great job and most of your wealth comes from your income, and is in your pension pot. In this case, I suggest it's not really a big deal. Why?


The income tax rates are not hugely different between NL and ES. So you're not trying to relocate to a low-tax jurisdiction (if you change your mind, then look at Bulgaria and Cyprus). I think the rate is slightly lower in Spain, but I don't think there's a huge amount in it. (If someone is moving from Finland to Cyprus, then these are the two extremes in EU taxation, and the difference is pretty substantial.)


Hence, your situation will be that you're an EU citizen, employed in NL, and automatically paying all your income tax and social security in NL. And you're paying more in NL than ES would want. In this situation, I am pretty sure than ES will be totally fine with it, and you won't need to worry about your exact tax residence status, or DTAs. (Why? Because the DTA effectively gives you credit for tax already paid in NL, which, in your case, is more than is due in Spain.)


If, as mentioned above, you have savings and investments and properties, then the income tax aspect of this wealth is obviously not captured by your employer's tax deductions. This is when it's essential that you're accounting for this to the Spanish tax authorities and paying the due taxes on it.


If your situation is that of the "average working joe" as described above, then I'm not even sure you need the faff of officially "exiting" NL. Especially as you continue as an NL employee and pay NL taxes, etc. If I were in your situation, I'd probably get a proper mailing address (not a mailbox, but similar) somewhere and keep my NL cell number, so that the tax office and the pension fund can still contact me. (I've done this in the USA for over 20 years.) Depending on exactly how expensive your employer's city is, and exactly how remote they are willing to be, I'd consider a cheap studio just as a base. If your employer is cool with 100% remote, or they have no problems with paying for a few days in a cheap hotel every time you come back for progress meetings, then you can skip this expense.


I know I'm saying the opposite of some other folks, who are saying it's a big deal, and both you and your employer need to do something. I stick with my view that it's a continuation of an existing employment agreement, but remotely. All due tax has been paid, and will continue to be paid.


The only necessary admin I see is doing the EU Citizen Registration. Getting a place to live, and adding yourself to the local padron.


The only slightly unsatisfactory issue in this arrangement is your healthcare. You'd be contributing in NL, and you'd have an EHIC for use in Spain. It should be fine, but it's not ideal. That's why (rather than tax) you might transition to autonomo/limited company in the future. But you could also leave your NL arrangement unchanged, as your "employed" status is only applicable to NL. In ES, you should be able to register with social security and make contributions on a different basis. You could be "unemployed" (this would be the lowest social security contributions), or you could be an "autonomo" (if you have any side-hustles that generate a bit of income).


The other issue for expats is the pension arrangements. The EU does have state pension portability so that you can potentially transfer x years of contributions in NL to ES and continue with one pension in ES. But it might be possible to keep them separate, and you might want to if NL pensions are much better. I never transferred my UK pension contributions as there is a very favourable option for non-residents to make voluntary contributions, so I topped-up to a full pension, and made separate contributions elsewhere. If you have LT contributions (which you didn't move to NL), perhaps there's a similar entitlement for you there. The issues are the cost of the additional contributions, and the minimum years to get any pension. (Almost all EU countries have systems which require X years of contributions to get ANY pension, and Y years of contributions to get a full pension. If you work N years, your pension is typically N/Y or 0 if N < X).


Finally, here's a bit about "Representative Offices". Your employer doesn't want to do business in Spain, they just want to let you work remotely! :-) So I still think it's not required.

https://www.guidetobusinessinspain.com/en/establecimiento-en-espana/2-6-4-oficinas-de-representacion/

awrg

Hello,


lots of text, but with all respect, I still don't follow this tax voodoo. I'm also software developer from EU, Lithuania, which wonder permanently to move to Spain, to buy there property, THAT'S IT. No any further manipulation with living place or moving to such wonderful countries like Bulgaria or Ireland, which are also dangerous with their crime levels, where I don't want to put my foot ever in my life. That's all.


And I currently already working full time (normal full time contract, which suppose to stay at office) in Lithuanian company, probably already for more than 6 years, where since pandemic company allowed to work from home, and I made additional vocal agreement with them that I wish to see our planet, may move in any country, still working in the same way for them. This is normal, full time contract, not some kind of online or freelancing work, what I worked previously with local business license for more than decade, what formally is different thing.


Let's say I buying property in Valencia (as I consider this city well fitting me, I don't want to have a car, EVER), making for myself temp. NIE from Spanish consulate in Lithuanian what also helps to open Bank account. This stuff is clear. And after arrival to Spain, purchase of property, I running first day to register as permanent resident to Spain, not waiting those 180 or whatever days, as I even don't want ever to return to Lithuania let's say.


What happens next?  Question just here.


Current my work, which I work remotely in Lithuania, I working still, receiving salaries, where all taxes nice paid for years. I know that people in our country declare incomes, if they had in other countries once per year. So I in the same way probably should declare such income after this somewhere to Spanish authorities...?


But do I'll need to pay some extra tax for it, what was already finely taxed in Lithuania?


So far as I know, if I got income in foreign country, but I'm LT resident, so I just declare such income and paid taxes, and normally I don't pay anything. Because if they put some extra taxation on this sum, my salary then can become too small to survive in Spain. Let's say, it is slightly below than avg Spanish salary, and my plan can work if I'll receive all those money + no rent, as I already purchased property there. What extra taxation can kill, my survival method. But maybe they'll consider that such income is below 2,5k eur and for that to not put too hard tax? I have no idea...


Of course, with time I'll learn Spanish, probably would abandon to work for that LT company when will be ready. I have some other plans, but very weak that moment. Since I'm not very rich, while can buy some property just and probably won't leave any extra funds after this. So then any mistakes can be costly and critical.


For me mostly just interesting legal case of exactly such situation, where this is full time job, which I already had before arrival to Spain, & so on.


BTW, your Sign Up via Google not working, as much as I tried. It all the time asked for pass and nothing happened, while signup or login via google makes that you don't need a password.. Something broken there, so I needed regularly to register.

awrg

Because as a business license holder, I know a bit about taxes in my country (Lithuania, EU), even though my knowledge is outdated. However, as far as I know, EU laws are still similar, harmonized to a certain level in all EU countries.


Let's say:


Country A is always permanent residence;

Country B is another country


Both of these countries are EU countries, where similar, perhaps slightly different tax tariffs are necessary, according to common EU standards. Similar, of course, does not mean the same and sometimes it can be slightly different.


If I received income in country B and did not pay any taxes in this country. By declaring income of country B during the annual tax return, the state will charge me to pay all the taxes that I must pay for my permanent residence in country A, even if they were not required by country B. This is fair and acceptable option and then I pay taxes only once, in country A, since I didn't paid them in B.


However, if I or employer paid all the necessary taxes in EU country B and then I declared this income with paid taxes in country A. I will only pay something if the taxes between countries A and B differs. For example in one country the tax is 21% and in the other 23%, and I only paid 21%, but in country A I would have paid 23%. The tax difference is then usually paid. Not the new 23% but only 2% or the difference in how much taxes differ between EU countries. Something like this.


Here's what I know about Lithuanian & EU taxes. Maybe in Spain, because it's an EU country, something similar? My current employer always obey law and pay all taxes in the EU country of Lithuania. As a result, this received income with taxes already paid in Lithuania, while permanently living in Spain, will already be after EU taxes. But I want to make sure that I understand correctly and that I am not wrong.

awrg

What I just learned more, that all or most EU countries seem to have mutual double taxation agreements in place to prevent paying taxes more than once, just as no one can avoid paying taxes through multiple countries. So once you pay something in one EU country, you probably won't have to pay in another EU country.


And some sources believe that if I received income in country B, I also paid taxes in country B, where the employer is more precisely obliged to pay them for me, according to the laws of country B, what as Income and already paid taxes I declare in another or country A, where I live permanently. More or less something like that.


Of course, when you work as a freelancer. You are most likely to receive payment when the payer does not have to pay taxes on your behalf. As a result, you must then pay taxes in your country of permanent residence. and then you must have some kind of freelancer status.


But in my case, it's a permanent job, only in country B, even online. According to the law, my employer must pay all taxes for me in Lithuania. Otherwise, he would be punished by the state for not paying taxes. This is a completely different status than when you work as a freelancer, at least for this particular job, when you have to pay taxes yourself and then you need a freelancer status. In Lithuania, this is a completely different category of taxpayers. I had this category also, but I currently not working like that.

rogerroberts22

Your question is very complicated. You certainly  need a Tax Accountant. From my point of view, I cannot see you earning enough to live in Spain. But this is just my opinion.

gwynj

@awrg


Good luck with your move to Spain, it's a lovely country! And Valencia is a very nice city (one of many).


1. To buy property you need a NIE, but you don't need to be a resident. You can, as you say, get a NIE at a Spanish embassy/consulate. Or, you can get it when you do your EU Citizen Registration in Spain. I'd suggest the latter is the better option as you kill two birds with one stone. :-)


2. As an EU citizen you enjoy Freedom of Movement and can easily move to any EU country (including Spain). The admin step is the EU Citizen Registration, and you book an appointment online (Cita Previa) at your local immigration office. In your case, you would register as economically inactive (as your work is outside Spain). This proof of funds and proof of health insurance. And you'll need to give an address in Spain (and apply in the appropriate office). This makes you a legal "temporary" resident, you'd be able to acquire "permanent" residence after living in Spain for 5 years.


cita previa

https://sede.administracionespublicas.g … io/icpplus


Certificado de registro de ciudadano de la Unión Europea

https://www.inclusion.gob.es/en/web/mig … ea-hi-101-


3. If you want to keep your current job/employer AND the current income tax/social security arrangement (i.e. both deducted by your current employer who pays you net), you can do that. I don't think there's any problem with this, and I suggest you don't worry about the tax situation (as you're paying it elsewhere). You'd need to grab an EHIC if you don't already have one.


4. For properties in Valencia I suggest you start by browsing Idealista. It's a big site so you can quickly see what you can get for your budget (both renting and buying).


5. The arrangement discussed in 3 above, is fine in the short-term, but it's probably not ideal in the long term. That's because if you do live permanently in Spain, then it might be better to pay tax and social security there instead, and you'd probably be better off to be enrolled in the Spanish public health system. You can keep the same job with the same employer, of course, but you'd change your status to autonomo (self-employed), or you'd incorporate a service company and be an employee of this entity. In both cases, you'd invoice your employer every month (gross), and make the appropriate deductions for income tax and social security (in Spain). You might have to consider VAT too.


6. You should register in the padron too (at your local town hall) once you've purchased a property.

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