IRPF withheld from U.S. translator invoice - can I get a refund?
Thread poster: Lesley Jackson

Lesley Jackson  Identity Verified
United States
Local time: 14:48
Spanish to English
Apr 8, 2009

Hello. I'm a U.S. citizen working here in the U.S. I need to invoice a research foundation in Madrid for translations I've done for one of their colleagues who is working here in the U.S. Over the course of this calendar year, I will be doing several more translations for him.

This foundation has told me they will withhold 24% of all amounts I invoice for IRPF.

I'm assuming I will be able to file some sort of tax return at the end of the year and get that IRPF refunded (assuming, also, that I will not have made enough money to incur a tax liability -- but that remains to be seen).

Does anyone have experience with this situation and/or know what the procedure is exactly for getting a refund?

I've done a fair amount of work from Spain but so far only through translation agencies. I have not had to deal with taxes of any kind myself. I bill in USD and they pay me in USD. This is my first "private client" in Spain.

It never occurred to me that they could or would withhold income tax from someone who doesn't have an NIF. Obviously I'm not registered with Hacienda either.

Thanks for any insights.


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James McVay  Identity Verified
United States
Local time: 14:48
Russian to English
+ ...
They probably should not withhold Apr 8, 2009

I think Spain has a double taxation agreement with the United States, but you might check it out on the webpage of Spain's Ministry of Economy and Finance.

A quick search turned up a discussion of IRPF here: http://www.eracareers.es/fecyt/guia/guia_cap10_en.pdf

Quoting:

Agreements to avoid double taxation. If the researcher is resident in a country with which
Spain has an agreement to avoid double taxation, the stipulations of this agreement will be carried out. In some cases the income will not be submitted to taxation in Spain. In these cases, the non resident researcher will have to justify that he/she is resident in a country with which Spain has subscribed the agreement through a certificate issued by the Authorities of the country in question.


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The Misha
Local time: 14:48
Russian to English
+ ...
This has been discussed countless times Apr 8, 2009

As a non-citizen and non-resident, you have zero tax liability in Spain, period. Your party may have withheld the funds from you as an honest mistake - in which case, it should be fairly easy to straighten out - or they are simply trying to rip you off. Unfortunately, I do not see how you can have any practical recourse against them, short of grossing your invoices up by the said amount or refusing to work with them altogether. In any case, this is something that better be spelled out before you even accept a job from a client overseas.

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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 20:48
Member (2005)
English to Spanish
+ ...
You don't do your taxes in Spain Apr 8, 2009

And therefore they should not withhold any IRPF (IRPF = Impuesto sobre la renta de las personas físicas; you don't live in Spain and don't pay that tax). They should pay you the full amount. They are entitled to withhold that for Spanish citizens or non-Spanish people permanently living in Spain and who pay taxes in Spain, not for people from other countries!

[Edited at 2009-04-08 16:29 GMT]


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 20:48
Member (2005)
English to Spanish
+ ...
The same with any company! Apr 8, 2009

lesleynoelle wrote:
I've done a fair amount of work from Spain but so far only through translation agencies. I have not had to deal with taxes of any kind myself. I bill in USD and they pay me in USD. This is my first "private client" in Spain.


Then the same situation as with an agency. A translation agency does not have any special status, different from any other company. If you are not withheld any amounts by agencies, the institution you refer to should not do it either. They are simply not entitled to do that.


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Lesley Jackson  Identity Verified
United States
Local time: 14:48
Spanish to English
TOPIC STARTER
thanks and clarifications Apr 8, 2009

The Misha, I haven't submitted the invoice yet, fortunately -- I had only received instructions. And I realize now that in those instructions, "extranjero" refers to a foreigner LIVING in Spain -- not to my situation. That "extranjero" would be covered under the double taxation agreement you mentioned.

So I will submit their invoicing form without showing the 24% IRPF deduction where indicated and hope that the person processing it doesn't deduct it.

Thanks, everyone, for your input.


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 20:48
Member (2005)
English to Spanish
+ ...
Exactly Apr 8, 2009

lesleynoelle wrote:
The Misha, I haven't submitted the invoice yet, fortunately -- I had only received instructions. And I realize now that in those instructions, "extranjero" refers to a foreigner LIVING in Spain -- not to my situation. That "extranjero" would be covered under the double taxation agreement you mentioned.


Indeed "extranjero" for tax purposes in Spain mean a non-EU citizen living and paying taxes in Spain. Not your case, so you should be paid your full invoice amount.


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