If an individual resides
in Spain for more than 183 days in any calendar
year, they are deemed resident for tax purposes.
Residents of Spain pay
income tax on income derived from within Spain and
worldwide. Expats posted to Spain may qualify for
a lower, flat rate of tax, imposed only on Spanish
source income, for a six year period (subject to
certain criteria). Non-residents only pay tax on
income derived from within Spain, with each instance
of income earned dealt with in isolation.
EU/EEA citizens may enter
Spain freely to live and work. No work permit is
required. It is recommended to obtain a residence
certificate and NIE (foreigner’s identification
number). Non-EU residents must obtain a Residency
Card as well as a visa.
Cost
of Residence Document (approx)
Work
Permit Required
Work
Permit Authority
A Residence Card can take months
to issue. A small fee of EUR6.75 is paid when handing
the form into the local police station. It is not
mandatory for EU nationals to have a residence card
but it is recommended if the plan is to live in
Spain long-term.
A Work Permit is not required for
EU/EEA nationals. Non-EU nationals must apply for
a work permit. There are various different types
of work permit.
Non-EU residents must apply to the
provincial office of the Ministry of Labour (Delegacion
Provincial del Ministerio de Trabajo). If not in
Spain, this can be obtained from the Consular office
in their country of residence.
Personal
Income Tax
Corporate
Income Tax
Social
Taxes
Income Tax is payable on a two-tier
basis, with a national and a provincial tax. The
total tax rate is on a scale from 24% for income
up to EUR17,707 to 43% for income in excess of EUR53,407.
The rate of provincial tax varies depending on locality.
A flat rate 25% tax (imposed solely on Spanish-sourced
income) may apply to certain expats posted to Spain.
30% Corporate Tax for companies with
profits in excess of EUR120,202. The rate is reduced
to 25% for profits below the threshold. SMEs are
defined as companies with a turnover of less than
EUR3m.
Contributions are paid on income
over EUR420 per month in respect of unemployment,
retirement and health care provision. Employers
pay 29.9% of gross wage and employees 6.35% (average
figures). Self-employed pay 29.8% of gross income.
Capital
Gains Tax
Property
or Wealth Tax
Stamp
Duty
The rate of Capital Gains Tax is
18%. In 2010, this will change – 19% on the
first EUR6000 profit and 21% above that figure.
There is a transfer tax on property
of 7%, though this is not due if VAT has already
been paid. VAT is charged at one of three rates
(4%, 7% or 16%), depending on the type of property.
A wealth tax is payable annually, of between 0.2%
and 2.5% of the property value – the first
EUR108,182 is exempt.
Stamp Duty is levied on the sale
price of property. The rate varies between 0.1%
and 1%.
Other
Taxes
Local councils or municipal authorities
levy a local property tax, or council tax, of between
0.5% and 1%. Land Appreciation Tax is also levied
when a property changes ownership. Income tax is
due on income received from property rental. The
standard rate of VAT is 16% (set to increase to
18% in July 2010) and there are also reduced rates
of 7% and 4%.
I am facing a dilemma and would like to invite any reader to advise me.
I am a Brit who has lived outside UK since 1993- initially in Belgium (5 years) & subsequently in 4 African countries. After a year outside UK, the UK Inland Revenue confirmed my status as ‘non-resident’ for tax purposes and as I have had no income in UK, I have not completed a UK tax return for many years. I visit UK very rarely, normally for one or two weeks per year.
In May 2011, I was made redundent by my employers, who were downsizing. This coincided with a move to retire in the Netherlands, where I now have official residency (my wife is Dutch). I thought that, at 63 years of age, I would be unlikely to find suitable employment; in fact, I have not tried hard and had resigned myself to permanent (but slightly premature) retirement.
However, to my surprise, I have recently been approached (through a mutual acquaintance) by a company that wishes to use my skills on a project in the Isle of Man. The role, if & when confirmed, would see me working for about 10 days a month in Isle of Man, with about 5-7 additional days per month, working from home. Contract will be for about two years. The firm has asked me to confirm if I would prefer to be paid (and therefore be taxed) in Netherlands or Isle of Man, the idea being that I create a self-employment entity for this employment. I have no data on which to base a response. Given Isle of Man's traditional ‘low tax ‘environment, are there any benefits to declaring an income in IOM? Are there any Isle of Man residency implications? Netherlands takes a tax cut on total world wide income, and, as I have never had any contact with the Dutch authorities, I am reluctant to start such a relationship now. Do I have to declare income in both countries, with a breakdown prorata to the time spent in each jurisdiction? Should I declare income to UK Inland revenue?
If anyone has pertinent advice on these points, I’d be grateful to hear them.
Hi, I live in South Africa, and along with 2 business partners (one in South Africa and one in Ireland - all South African citizens though) are setting up a company that designs Smart phone applications. As they will be sold on the various platforms (none of which operate out of South Africa)we have to list our company as operating out of Ireland anyway. As such, we have decided to set up our company in the best tax country and are wanting info on whether Jersey or Malta is best? If anyone has some inside info we would really appreciate it!! Thanks!Mary
Just wondering if anyone 'on the ground', as it were, might be reading and able to help me...I was considering relocating my hairdressing business from the UK to Ireland before the economy started to go properly belly-up...now, not so much.
Are things as bad as they seem over there, or is it being over-hyped by the media? And is the government still keen to support small business people? Cos if not, I'll look elsewhere...
I am moving full time to France in Jan 2012 where I will be working as a freelance contract engineer to a number of Australian based companies. It is my choice to move to France not a work requirement. I will be renting my house out in Austrlalia and renting a house while I am in France. I hold both EU & Austrlain citizenshiip. I am married with 2 young children. Approx total family income $100k AUD. Do I pay tax in France or Australia or both ? Any help or guidance would be much appreciated.France move
Cyprus
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