Taxation for pro translators in the Zona Especial Canaria (ZEC)
Thread poster: Jo Macdonald
| | lexical
Local time: 23:12
Portuguese to English
It was you that was relating the horror story of 85% tax in Italy, wasn't it?
I don't have any personal experience of Las Canarias but the official site of the ZEC (http://www.zec.org/) is quite informative - and it's in several languages including EN and IT.
To qualify for the tax incentives, it looks as though a) you must set up a company in the ZEC b) you must invest at least 100,000€ c) you must create and maintain at least 5 new jobs. On the face of it, it doesn't look as though self-employed professionals qualify.
The site has a list of qualifying activities but I didn't spot translation/language services in it.
On the other hand, a move to the Canaries or any other part of Spain could benefit you. I've lived in both Italy and Spain, and my standard of living is much higher here. In Milano, I felt I couldn't afford to breathe; here I don't think twice about eating out, for example. Apart from the lower cost of living, you'll almost certainly pay less tax (though this isn't a low tax country). As a very rough guide, if you earned, say, €30,000 euros and had the usual translator's deductibles, you could expect to pay around 15% of your gross income in tax. (And none of it is payable in advance).
Plus the Canaries don't have VAT but their own sales tax (IGIC) at only 5% on goods and services.
Good Luck! If you find translators can relocate to the ZEC and pay 1% tax, please let me know!
| || || |
| translator in Canarias || Sep 16, 2007 |
I have lived in the Canaries for 2 years, and sorry to burst your bubble, but we pay a bit more than 1% tax. I currently pay 20% income tax over my net profits. Certainly much less than you seem to be paying in Italy.
I must say though that the paperwork is horrendous so I have someone do it for me which costs about 100 euros a month. You only have to charge IGIC to clients in the Canaries, and since I don't have any that doesn't apply to me. The first year you are exempt anyway. I must also say the tax office is extremely efficient here - they will never allow you to miss a payment but you'll have your rebate within one week of filing for it.
You will have to pay about 220 euros a month in Social Security which gives you free healthcare and from October onwards there will be some other benefits like maternity pay, although I haven't got round to reading the new info from the Government on that. Again the first year there's some kind of bonus and you only pay 180.
All in all, I would say you are better off here than in Italy.
| || || |
I think that apart from VAT being lower than on the mainland, taxation on income is no different than taxation on the mainland of Spain - and the problem with living on an island is that you always have to take a flight or a ferry to leave the island.
Even if there is a discount for residents, it is a bit of a pain. I lived in Palma (de Mallorca) and moved to the mainland and one of the reasons was that I did not want ti live on an island any longer.
I also have a bookkeeper (gestor) for my paperwork, but that does not have to cost € 100 per month!
In Spain you pay tax after each quarter, and then the next year in June you either pay or get some money back (which is usually the case as you do not earn the same amount every quarter). VAT return over the past year is in January.
Social security is paid monthly, as 28.5% over a 'virtual' income. This means that in case of an accident you will get a percentage of that virtual income, which is not a lot.
It definitely sounds as if Italy is a lot worse though!
| || || |
| Thanks folks || Sep 17, 2007 |
Great info, so pretty similar to mainland Spain; miles better than my current situation. It’s definitely a possibility I’m considering.
| | inselaffe
Local time: 23:12
German to English
| IGIC and issuing invoices from Canarias to business clients in other EU member states || Jan 11, 2009 |
Justine Fischbach wrote:
You only have to charge IGIC to clients in the Canaries, and since I don't have any that doesn't apply to me.
I would be very grateful if you, or any other translators living and working in the Canaries, could elaborate on this point.
I am moving to Tenerife this year and am currently trying to find out how to invoice my clients properly.
I work exclusively for business clients based in Germany and had presumed that the ruling you mention ("You only have to charge IGIC to clients in the Canaries") would apply, exactly as it applies to IVA if you're living on the mainland (or VAT for any business conducted between two parties in different EU member states for that matter).
Am I right when I say that this type of business in the ZEC works just as it does elsewhere in the EU?
I issue invoices with a purely net price with no additions for IGIC.
I include my NIE tax number with the prefix "ES" and the international tax number of my German client somewhere on the invoice (as outlined in this thread: http://www.proz.com/forum/business_issues/27984-invoicing_a_uk_customer_from_spain_vat.html).
Many thanks in advance.
[Edited at 2009-01-11 19:50 GMT]
| || || |