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bigduckontax
bigduckontax, Accountant
Category: Tax
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I am a resident of Spain, my work contract is with a company

Customer Question

I am a resident of Spain, my work contract is with a company in the UK. I pay UK taxes and NI. Do I need to pay taxes in Spain, or do I need to declare my earnings and tax payments to the Spanish Tax Authorities.
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.

Hello, I am Keith one of the experts on Just Answer and happy to help you with your question.

You most certainly are liable to Spanish Income Tax. Here is a very useful summary from AngloInfo:

'You will become liable for tax as a resident of Spain if:

  • a) You spend more than 183 cumulative days in one calendar year in Spain i.e. 1st January to 31st December, which is the tax year. You will become liable whether or not you formally register in the Registro Central de Extranjeros or
  • b)Your centre of economic interests is in Spain, i.e. the base for your economic or professional activities is in Spain or
  • c) Your centre of vital interests is in Spain, i.e. your spouse lives in Spain and you are not legally separated, and/or your dependent minor children live in Spain.

In Spain, an individual is either resident or not resident for the whole tax year. Part-year tax residency is not part of the Spanish system.

As As a resident of Spain you will be liable for tax on your worldwide income at scale rates after any available allowances and deductions'

So there you are, simple, as the Meerkat in the TV advert would say.

All is not lost though as through the Double Taxation Convention between the UK and Spain any tax deducted by the UK is allowed as a tax credit against any Spanish tax liability on the same income stream so you are not taxed twice. However, the Convention does not protect you from differences in rates of taxation.

I do hope that this answer has been useful to you. You may well have to employ a local agent in Spain in this matter.

Customer: replied 2 years ago.

If I declare my UK Taxes to the Spanish Tax Man, can he ask me to submit subsequent Tax Returns for up to how many years?

Expert:  bigduckontax replied 2 years ago.
Spanish Limitation Law indicates that 15 years is a possibility. It can, however, differ depending upon which part of Spain you live. In Catalonia for example it is 10 years, but Navarra, 30 years. You will have to consult locally on this. Unfortunately Spain is one of the highest taxed countries in the EU, in comparison the UK is a tax haven!
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.