Beatriz Rodríguez wrote:
Egypt and Spain are bound by a Double Taxation Agreement in order to avoid fiscal evasion and double taxation on income and on fortune. It was signed on June 10, 2005.
Double taxation agreements relate to income that could be taxed by either country, or indeed by both if there were no agreement. For example, if an employee of a Spanish company is seconded for a while to their Egypt office, tax could be due in both countries in the absence of an agreement.
As most of you know already, the Spanish Tax Authorities demand Spanish agencies to request a fiscal residence certificate (or a similar document) to our freelance linguists as proof of the translator's fiscal status.
Are you 100% sure of that? What I believe to be the truth is that agencies are required to make all necessary payments of tax to the authorities here. All businesses registered here in Spain should deduct IRPF from their invoices, and the agency pays that amount of IRPF to the authorities on their behalf. But that only applies to those doing business here.
The address on the invoice, along with any local tax information, determines where the business is registered. Certainly, if they give any sign of being taxable here (NIF/CIF, Spanish address and/or email address...) and yet don't deduct IRPF, you'd need to investigate. But if you get an invoice in from an Egyptian address, and everything in your dealings leads you to suppose that this freelancer is actually doing business from Egypt not Spain, then I don't believe you have anything to fear from the Spanish authorities. You just need to do due diligence - which does not mean you have to demand a particular piece of paper from everyone around the world to prove things that can't be proven.
National ID or passports are not valid to prove tax residence. These documents show residency but are not related to taxation.
Indeed. And it's a flagrant intrusion of a freelancer's personal life to request one. They have nothing to do with their business. (And anyway my own passport is a British one whereas I'm both physically and fiscally resident in the Canary Islands!)
When we ink an agreement or start work with a new freelancer we demand a tax certificate as a way to know that freelancers are not shirking tax responsibilities. Depending on the country, this certificate could be a fiscal residence certificate or any other similar certificate. What we need is a formal certification that wages are reported to the government.
"Wages"? They aren't employees - it would indeed be different if they were.
"To know that freelancers are not shirking tax responsibilities"? Why? What does that have to do with you, if they don't live or do business here in Spain? I really don't believe you're being asked to do that. You have a duty to collect tax from everyone who IS doing business here, that's all. This demand for proof of tax status of anyone who ISN'T doing business here is just putting the onus of proof on your supplier when it's you who should be doing due diligence.
Sorry, I don't mean this to sound like a personal attack on you . I know it's a very common belief here that you need to have certain bits of paper, and you certainly aren't alone in demanding these ones. But it's unreasonable to put the onus on the supplier to oblige the Spanish tax authorities. If you check with your tax office, from the angle of "We know this freelancer isn't living here or running a business here, so we don't need any other proof of their tax situation, do we?", I'm sure you'll find they'll agree that you don't need to hassle them further. Let them be answerable to their own tax authorities and police.
If you look at it from the point of view of freelancers, you can see that we can't possible comply with the different needs of every tax regime in the world. I personally deal with clients in around 20 different countries each year. I certainly don't see why I should have to prove to all of them that I'm taxed here - and none have asked me to (with the exception of a Romanian agency). The fact that I'm sending an invoice from my freelance business in Spain (address + NIE) is proof enough.