Social Security question for David
Re: Social Security question for David
Yes of course it is, a personal tax allowance is just that, regardless of your work category. I have only ever been self employed here and I have this allowance every year the same as an employed person.
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Re: Social Security question for David
The rest of that is OK but the allowances for over 75 are wrong - they are 7191 not 6273.Jool wrote: Personal allowances for Spanish income tax purposes are €5,151, which increases to €6,069 for persons over age 65 and €6,273 for persons over age 75.
Sid
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Re: Social Security question for David
If your only immediate concern is health care then you might also want to look at private health insurance. The monthly payments are likely to less than your autonomo payments. We have been with ASISA for years and found them to be excellent. You have almost instant access to the most modern equipment and analysis.
You have to sign up while you're still healthy though. They wont cover you if you stagger in clutching your heart saying "where do I sign?" (although the Spanish national health will most likely save your life and then ask you to pay).
You have to sign up while you're still healthy though. They wont cover you if you stagger in clutching your heart saying "where do I sign?" (although the Spanish national health will most likely save your life and then ask you to pay).
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Re: Social Security question for David
for the iva, don't you have to have a turnover which is over a certain threshold?
Anyway, if you were to register for iva, you would not charge iva to the uk company, as they would give you their vat number. If you are not registered for iva, then you cannot charge it.
on the ss registration element, I found this interesting site....
http://www.spainaccountants.com/redtape.html
to register with the tax office as self employed, they say you need to fill out form 036.
to register as a self employed person with the Social Security office you need a copy of tax office form 036.
this appears to be a 'gotcha!' as you need to be registered for tax before registering with social security.
Anyway, if you were to register for iva, you would not charge iva to the uk company, as they would give you their vat number. If you are not registered for iva, then you cannot charge it.
on the ss registration element, I found this interesting site....
http://www.spainaccountants.com/redtape.html
to register with the tax office as self employed, they say you need to fill out form 036.
to register as a self employed person with the Social Security office you need a copy of tax office form 036.
this appears to be a 'gotcha!' as you need to be registered for tax before registering with social security.
ádh mór ort agus sláinte.....
(Good luck and good health)!
(Good luck and good health)!
Re: Social Security question for David
Colinm wrote:for the iva, don't you have to have a turnover which is over a certain threshold?
Unfortunately there is no VAT threshold in Spain so VAT (IVA) has to be charged on all invoices except between vat registered individuals or companies with the EU.
And yes you were right to point out that an autonomo has to register both with the SS and Hacienda and where I am the SS will not allow a baja until they see a copy of the baja from Hacienda.
In a time of universal deceit, telling the truth is a revolutionary act. George Orwell
Re: Social Security question for David
If you are registering on the system you need to do the alta, baja is for signing off..........and you do need to register with Hacienda first. I would advise speaking with a gestor as the way in which you are registered (ie which kind of autonomo) and your epigrafe (the category of work you are registered under) are important and you need the best one for your circumstances.
I have also always charged VAT on every invoice I issue so am not sure about Bongtrees info above re no VAT between registered individuals.
I have also always charged VAT on every invoice I issue so am not sure about Bongtrees info above re no VAT between registered individuals.
Re: Social Security question for David
Oooops, Was thinking not writing, I meant that in order to stop paying autonomos SS here insist that they see a baja from Hacienda, so there is absolutely no way of just paying autonomos in order to get health cover as person needs to show income or they will insist that they sign off.
Also I meant to write VAT registered companies based in different countries within the EU (as opposed to within the same country) so a company VAT registered in Spain and another VAT registered in France will invoice without VAT.
Also I meant to write VAT registered companies based in different countries within the EU (as opposed to within the same country) so a company VAT registered in Spain and another VAT registered in France will invoice without VAT.
In a time of universal deceit, telling the truth is a revolutionary act. George Orwell
Re: Social Security question for David
Yes I don´t pay VAT to businesses based in other european countries as the VAT rates are different and it then become prejudicial so I also follow this without a problem although as autonomo you may need to insist on it with larger UK businesses.....
VAT registered companies based in different countries within the EU (as opposed to within the same country) so a company VAT registered in Spain and another VAT registered in France will invoice without VAT.
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Re: Social Security question for David
FROM DAVID SEARL
FOR ZOFIA and all the others
Wow, what a response this drew, Zofia. Let's see if we can clear things up a bit.
1. If you live here more than 183 days, yes, you are a de facto resident and required by law to register as an EU resident in Spain, and be taxed on your worldwide income.
2. Yes, you can register as self-employed, an "autonomo". You fill in Form 037, the "census" form with the Tax Agency and are assigned a code number indicating your line of work. Perhaps you are an on-line "consultant" to a shipping company, or whatever. Then you register for Social Security, about 265 euros a month. Now you are legal in Spain.
3. You make quarterly tax declarations as self-employed. If you show "sin actividad" or no business, for a long time, someone in the Tax Agency will want to take a closer look at your situation. Because now you are legal, but you are a tax evader. The UK income is subject to Spanish tax, see.
4. If you want to do things right, you will declare your UK income in Spain and pay Spanish tax on it. The tax should be about the same as the tax you pay in the UK. You then fill in the Tax Agency form that allows you to deduct your Spanish income tax paid from income tax paid in the UK. You also file to go off the UK NHS because you are resident in Spain on the Spanish Social Security. So your company no longer deducts UK Social Security payments from your wage. (I take it that you are really an employee for them).
So you are not taxed twice and you are not paying into two separate Social Security systems. Or you could continue paying into two systems and get two pensions. If you work in Spain from 50 to 65, you qualify for a minimum Spanish pension separate from and in addition to the UK.
5. You will have to "fudge" some invoices to your company for the amounts you are actually paid. There is no IVA and no withholding tax "retenciones" on these cross-border operations, so you do not have to worry about those. Howeve, when you make your quarterly tax declarations, you will have to pay up the income tax due on what you have been paid so far, presenting your "invoices" "facturas" as justification. If you want to be totally legal, you will have to convince your company in the UK to treat you as a contracted professional and really pay your real invoices. You should be all right with the "fudge" system, however, if your company wants to keep you as an employee.
6. You do not lose out on pensions or medical care because when retirement time comes, you can combine the amounts paid into the UK system with the amounts paid into the Spanish system to compute your total pension.
7. Thank you, Jool, for listing the personal allowances for income tax in Spain, and thank you, whoever noted that all this material is in You and the Law in Spain, by David Searl, available at bookshops and from the publisher Santana directly (See Welcome paragraph). You will find a number of deductions for children available to you, as well. I should imagine you come out about the same in Spain as in the UK, but you will have to do the exact numbers to be sure of it. Spain certainly does have personal and family deductions, or allowances as you say.
8. In fact, this post is getting to be as long as the book, so I think we will give it a rest for now. But keep the questions coming. I must have left out something.
9. You can probably get private medical insurance for you and two children for under 200 euros a month.
Good Luck with it, David Searl
FOR ZOFIA and all the others
Wow, what a response this drew, Zofia. Let's see if we can clear things up a bit.
1. If you live here more than 183 days, yes, you are a de facto resident and required by law to register as an EU resident in Spain, and be taxed on your worldwide income.
2. Yes, you can register as self-employed, an "autonomo". You fill in Form 037, the "census" form with the Tax Agency and are assigned a code number indicating your line of work. Perhaps you are an on-line "consultant" to a shipping company, or whatever. Then you register for Social Security, about 265 euros a month. Now you are legal in Spain.
3. You make quarterly tax declarations as self-employed. If you show "sin actividad" or no business, for a long time, someone in the Tax Agency will want to take a closer look at your situation. Because now you are legal, but you are a tax evader. The UK income is subject to Spanish tax, see.
4. If you want to do things right, you will declare your UK income in Spain and pay Spanish tax on it. The tax should be about the same as the tax you pay in the UK. You then fill in the Tax Agency form that allows you to deduct your Spanish income tax paid from income tax paid in the UK. You also file to go off the UK NHS because you are resident in Spain on the Spanish Social Security. So your company no longer deducts UK Social Security payments from your wage. (I take it that you are really an employee for them).
So you are not taxed twice and you are not paying into two separate Social Security systems. Or you could continue paying into two systems and get two pensions. If you work in Spain from 50 to 65, you qualify for a minimum Spanish pension separate from and in addition to the UK.
5. You will have to "fudge" some invoices to your company for the amounts you are actually paid. There is no IVA and no withholding tax "retenciones" on these cross-border operations, so you do not have to worry about those. Howeve, when you make your quarterly tax declarations, you will have to pay up the income tax due on what you have been paid so far, presenting your "invoices" "facturas" as justification. If you want to be totally legal, you will have to convince your company in the UK to treat you as a contracted professional and really pay your real invoices. You should be all right with the "fudge" system, however, if your company wants to keep you as an employee.
6. You do not lose out on pensions or medical care because when retirement time comes, you can combine the amounts paid into the UK system with the amounts paid into the Spanish system to compute your total pension.
7. Thank you, Jool, for listing the personal allowances for income tax in Spain, and thank you, whoever noted that all this material is in You and the Law in Spain, by David Searl, available at bookshops and from the publisher Santana directly (See Welcome paragraph). You will find a number of deductions for children available to you, as well. I should imagine you come out about the same in Spain as in the UK, but you will have to do the exact numbers to be sure of it. Spain certainly does have personal and family deductions, or allowances as you say.
8. In fact, this post is getting to be as long as the book, so I think we will give it a rest for now. But keep the questions coming. I must have left out something.
9. You can probably get private medical insurance for you and two children for under 200 euros a month.
Good Luck with it, David Searl
You and the Law in Spain
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Re: Social Security question for David
Jool wrote:Personal allowances for Spanish income tax purposes are €5,151
Earned income above these allowances is taxed at the following rates:
Income (above allowances) Spain’s national tax rate Provincial tax rate Total tax rate
€0 - €17,707 15.66% 8.34% 24%
so how do you apply this personal allowance? does the gestor do it each trimester? divide the 5,151 by 4 to get the timester figure and deduct that from your earnings before working out the amount of tax that you have to pay ?
or do you pay 24% of your earnings, and then get back any excess that you´ve paid ?
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Re: Social Security question for David
What Jool has quoted is incomplete.
In addition to the personal allowance of €5151 there is another allowance of between €4080 – €2652 (on a sliding scale on incomes from 9180 – 13260).
For the current tax year the €400 deduction from any tax due is still in force but it will not continue past this year.
Sid
In addition to the personal allowance of €5151 there is another allowance of between €4080 – €2652 (on a sliding scale on incomes from 9180 – 13260).
For the current tax year the €400 deduction from any tax due is still in force but it will not continue past this year.
Sid
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Re: Social Security question for David
Although my OH pays tax in the UK on his pensions and so do I, now that we are full-time residents here we file a tax return. We used a Gestor and the cost of using him was only €30.00. For us it would be crazy not to file tax returns because as Sid pointed out, the CGT and Inheritance Tax allowances for tax residents will be important to one of us one day!
P.S. Anyone seen this?
http://research.dwp.gov.uk/campaigns/be ... abroad.asp
P.S. Anyone seen this?
http://research.dwp.gov.uk/campaigns/be ... abroad.asp
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Re: Social Security question for David
spanish_lad wrote:Jool wrote:Personal allowances for Spanish income tax purposes are €5,151
Earned income above these allowances is taxed at the following rates:
Income (above allowances) Spain’s national tax rate Provincial tax rate Total tax rate
€0 - €17,707 15.66% 8.34% 24%
so how do you apply this personal allowance? does the gestor do it each trimester? divide the 5,151 by 4 to get the timester figure and deduct that from your earnings before working out the amount of tax that you have to pay ?
or do you pay 24% of your earnings, and then get back any excess that you´ve paid ?
anyone ?
Alhaurin el Grande since 99, working at the airport since 2011.
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Re: Social Security question for David
FROM DAVID SEARL
FOR EVERYONE,
GOSH, THIS IS GETTING OUT OF HAND. TO ANSWER ONE SPECIFIC QUESTION, NO, YOU DO NOT SUBTRACT YOUR PERSONAL AND FAMILY ALLOWANCES BY THE QUARTER. YOU DO THAT AT THE END OF THE YEAR WHEN YOU MAKE YOUR FINAL YEARLY DECLARATION.
FOR ALL THE REST, ALL GOOD STUFF, THANKS TO ALL OF YOU. IF YOU WANT TO GET YOUR TAX FIGURED OUT, SIT DOWN WITH YOUR TAX CONSULTANT AND GO THROUGH IT ALL. IF YOU READ THE TAX CHAPTER IN "YOU AND THE LAW IN SPAIN" YOU WILL HAVE A SOUND BASIC APPROACH TO IT.
THANKS TO ALL AGAIN, DAVID SEARL
FOR EVERYONE,
GOSH, THIS IS GETTING OUT OF HAND. TO ANSWER ONE SPECIFIC QUESTION, NO, YOU DO NOT SUBTRACT YOUR PERSONAL AND FAMILY ALLOWANCES BY THE QUARTER. YOU DO THAT AT THE END OF THE YEAR WHEN YOU MAKE YOUR FINAL YEARLY DECLARATION.
FOR ALL THE REST, ALL GOOD STUFF, THANKS TO ALL OF YOU. IF YOU WANT TO GET YOUR TAX FIGURED OUT, SIT DOWN WITH YOUR TAX CONSULTANT AND GO THROUGH IT ALL. IF YOU READ THE TAX CHAPTER IN "YOU AND THE LAW IN SPAIN" YOU WILL HAVE A SOUND BASIC APPROACH TO IT.
THANKS TO ALL AGAIN, DAVID SEARL
You and the Law in Spain
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Re: Social Security question for David
so you are in effect saying that you pay 24% quarterly, then at the end of the tax year, you (or the gestor) files a "total" form.. and you get that tax back, or at least deducted from the next year?
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Re: Social Security question for David
It's the same for employed people. The tax is deducted from your income and at the end of the year you have the option to submit a normal tax declaration and if you have paid too much tax you get a rebate.
I have a suspicion that employees get the benefit of the personal allowances when they work out how much tax to deduct so it is less of a problem - it's probably things like mortgage relief that don't get taken into account.
Maybe someone out there on a normal contract can confirm that.
Sid
I have a suspicion that employees get the benefit of the personal allowances when they work out how much tax to deduct so it is less of a problem - it's probably things like mortgage relief that don't get taken into account.
Maybe someone out there on a normal contract can confirm that.
Sid
Re: Social Security question for David
Now you know why working with black money is essential for the self employed.spanish_lad wrote:so you are in effect saying that you pay 24% quarterly, then at the end of the tax year, you (or the gestor) files a "total" form.. and you get that tax back, or at least deducted from the next year?
Who can afford to have all that money deducted from their gross income with no allowances for purchases or allowances?
In a time of universal deceit, telling the truth is a revolutionary act. George Orwell
Re: Social Security question for David
Spanish Lad - get registered as an autonomo empresarial.
I deduct all relevant and allowed expenses each quarter, all IVA I have paid out, all Seg Social paid and then I pay the balance of IVA (for which I am really only a tax collector for the government). Then I pay 20% tax on my gross income left. Over the year this more or less works out ok if I am receiving average and not excessive earnings as there is a sliding scale of tax bands.
Then each year I either get my tax back (normally within a month of submitting my Renta) or pay them the balance I owe them in 2 instalments - July and November........
Hope this helps........
I deduct all relevant and allowed expenses each quarter, all IVA I have paid out, all Seg Social paid and then I pay the balance of IVA (for which I am really only a tax collector for the government). Then I pay 20% tax on my gross income left. Over the year this more or less works out ok if I am receiving average and not excessive earnings as there is a sliding scale of tax bands.
Then each year I either get my tax back (normally within a month of submitting my Renta) or pay them the balance I owe them in 2 instalments - July and November........
Hope this helps........
Re: Social Security question for David
Jool does that mean you have an SL? ( I have never heard of autonomo empresarial)
In a time of universal deceit, telling the truth is a revolutionary act. George Orwell
Re: Social Security question for David
No I am not an SL but David Searl updated himself on here under the heading re invoice retentions - a good gestor can get you registered as an autonomo empresarial so you operate on pretty similar lines to an SL in terms of quarterly returns..........see next post, I found it and pasted it on for you
Last edited by Jool on Thu Oct 15, 2009 11:48 am, edited 1 time in total.
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