Moving to fuerteventura. Autonomo, taxes, residence, etc...

danielok · January 30, 2014, 15:44:15 PM

Hi everyone!

I'm moving to fuerteventura, in a couple of weeks. I have some questions about paperwork, hope you could help me...

I'm an italian citizen, a software developer, working online for a client in germany since a couple of years ago.

Basically, I want to be able to write invoices from Spain, pay taxes there, etc... Where do I start?

* Register as a resident.
* Get a NIF, get a bank account (to start receiving payments)
* Register in Social security
* Anything else?

Can I do everything in Fuerteventura? or do I have to go to Gran Canaria, or other place?
Thank you!

Deso · January 30, 2014, 18:10:30 PM

Speak to Sabrina at Canary Admin Services, she can advise/help you. She speaks English and Spanish.

www.canaryadminservices.com

SheilaW · January 30, 2014, 22:55:05 PM

Hello,

You have a perfect right to stay here on holiday (a working holiday if you like) for 3 months. During that time, you apply to become an autonomo - I had someone do that for me but I think it's fairly simple as he didn't charge too much

. If you haven't already been assigned an NIE number (you need one to buy a car, rent or buy a property, open a bank account etc), you will need to get one then - it's a simple procedure in Puerto, and you just register it at the Hacienda (I think) to turn that same number into a NIF. At the end of 3 months (or earlier if you wish) you have to apply for residency if you want to stay on. That involves another trip to Puerto to be given a grilling by the police who will want evidence that you're setting up a real business, not just trying to get onto the register for state benefits. If you pass, you'll be given a little green piece of paper called "registro". With autonomo papers and registro, you're all set to register with the social security, also at Puerto.

If you're living here then it's only sensible to have a bank account here. However, your payments don't HAVE to come here: I'm an autonomo with clients all over the world who can choose to pay into my UK, French or Spanish account (or PayPal or Skrill). It all gets taxed by Spain as the invoices are from a Spanish-registered business.

As Deso says, insider help is worthwhile, and essential if you don't speak the lingo.

Feel free to send me a PM if you like.

danielok · January 31, 2014, 10:57:53 AM

Thank you Sheila! that's really helpful, now i know where to start

If later on I get lost in paperwork I'll get in touch with Canary Admin Services, as Deso suggested.

stengun · February 18, 2014, 11:50:27 AM

Hi,

Could I jump in and ask a similar question, as my situation is very similar. I'm moving to FV in April. I currently work for myself (well co-owner) of a UK Ltd company. I therefore get paid PAYE and some dividends as and when. I've just spoken to HMRC about moving to Spain, and they say all I need to do, is inform them I'm moving when I do my tax return. So effectively that will be April 2015 (that doesn't sound right to start with). When I asked about what the Spanish Government would require me to do, they didn't really seem to know, and weren't very helpful.

So I'm reading lots of helpful info about on becoming autonomo, etc.... But I guess my question is: Do I actually have to do this? I'm thinking after 183 days I do? In an ideal world though, I'd like to just keep things simple and as they are. But I'm guessing that's not going to be possible in the long term?

SheilaW · February 18, 2014, 16:38:58 PM

Quote from: stengun on February 18, 2014, 11:50:27 AM
So I'm reading lots of helpful info about on becoming autonomo, etc.... But I guess my question is: Do I actually have to do this? I'm thinking after 183 days I do?

I'm not exactly sure about the last dates for doing things - they all seem to conflict and leave hundreds of "Yes, but...?" questions in my mind. That's why I got down to it almost straight away. I invoiced my clients from my previous business address for 6 weeks, then as an autonomo here.

The thing is, you're supposed to get residency sorted by the end of three months, but that's about declaring where your primary residence is, not where your tax domicile is. Now, the only way you can get residency in Spain nowadays, unless you're a pensioner, is to either take out private health insurance and have lots of money in the bank etc (no more EHIC for you); or to get a job/set up a business and so start contributing to (and from) the local social security system. I believe that if you've got a UK company then you CAN keep it open and trading for ever more - I knew a Brit who'd lived in France for yonks and was still invoicing from his UK company and being paid a salary by that company. But I think you'd need to declare your income to Spain (as well as to the UK, but not paying twice) if/when you're here for over 183 days in a year.

Taxes over here are high, so if you're clever with juggling then you'd likely save by staying UK-based. But I personally can't be doing with those complications, particularly with every encounter with officials here being so stressful on account of the language barrier. I just wanted to get it over and done with. Now it's really simple, if somewhat expensive: I know where 'home' is, I know that everything I do is 100% legitimate (apart from putting the rubbish in the bins during the day

), I know what my accountant expects from me, etc.

I guess it depends on how you define

QuoteI'd like to just keep things simple.

stengun · February 18, 2014, 18:42:24 PM

Thanks for the response Sheila. This is beginning to sound a bit more complex than I first thought. I don't actually want/need a job in Spain, so is that going to cause me problems staying for more than 183 days? In my head I thought I was keeping things simple as my business is based in the UK. So to continue to do PAYE and NI as such, seemed a bit easier. I'm guessing though, the Spanish government will want their pound of flesh eventually

Out of interest what is the typical income tax for autonomo, and dare I ask how things like dividends work under the Spanish system?

SheilaW · February 18, 2014, 21:21:52 PM

I'm way out of my depth here, stengun. I really think you need to speak to a Spanish accountant who knows a bit about how things work in the UK too. I can tell you that an autonomo pays a minimum of around 280€ per month in social security and 20% or thereabouts in tax. Wouldn't know a dividend if I fell over one - sorry.

stengun · February 18, 2014, 21:47:42 PM

Thanks again for the reply. Just to add another bit of confusion into this all. I've read that there is in fact an official work status known as "Freelance", whereby you only pay the social security as and when. This is suitable for people that have irregular work. This might be the way to go if people work short-term contracts. I certainly can do (for tax purposes anyway). But yes, I think I will need to speak to an accountant!

SheilaW · February 19, 2014, 14:54:10 PM

Quote from: stengun on February 18, 2014, 21:47:42 PM
Thanks again for the reply. Just to add another bit of confusion into this all. I've read that there is in fact an official work status known as "Freelance", whereby you only pay the social security as and when. This is suitable for people that have irregular work. This might be the way to go if people work short-term contracts. I certainly can do (for tax purposes anyway). But yes, I think I will need to speak to an accountant!

Yes, I know about that but I'm not sure where it fits in. I suppose it would work for a pensioner, who can get state health cover here through an arrangement with the pension provider, but a younger person would be ineligible for social security here, so you'd need private means and you'd have to declare that you'd never take from the state coffers, whatever happened. What that could mean in practice, I'm not sure.

emmi · February 19, 2014, 21:18:19 PM

Isn't there a double taxation agreement between Spain and the UK where you can elect to choose you tax base?

Some info here

http://www.hmrc.gov.uk/international/dta-intro.htm

PHo · February 20, 2014, 18:31:53 PM

Double taxation agreements don't let you choose, Emmi. They just allow you to offset tax paid elsewhere against your home tax bill.

stengun · February 20, 2014, 18:44:52 PM

Yes, it looks like I'm going to continue to pay tax in the UK, then at the end of the Spanish tax year, fill out my return. Then offset that tax bill with the double tax agreement, and pay the difference. I'm going to seek more advice here in the UK before I leave, and again in FV when I arrive in April. Still not clear on the Social Security side, and if I stop paying NI back home. But I'll keep you all posted as I find out more.

Neilclarke · May 02, 2014, 14:10:43 PM

Any income from 6th April 2014 to 5th April 2015 will not need to go on a UK tax return until 31st Jan 2016, although you may not need to complete one if all of your income is PAYE and you are a basic rate taxpayer.

UK dividends are taxed at 10% at source. If they originate from an ISA, no further tax is payable. If not you will need to pay tax upto your marginal rate via a tax return.

Sorry I cannot help with Spanish dividends, although if your dividends are from a UK listed company, I would be surprosed if you have to pay spanish tax.