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Freelance in Spain - Tax
Thread poster: Steve Dreggs
Steve Dreggs  Identity Verified
Local time: 04:04
Spanish to English
+ ...
Aug 9, 2011

Hello,

I'm moving to Spain shortly and wish to work as a freelancer while I'm there. I have some questions about tax etc. Any help from someone who has done this or has knowledge in this area would be great.

1) How do I register as self employed in Spain?

2) Do I need to get a Spanish VAT number?

3) Can people pay me into my English bank account if I'm working in Spain? And if so, does this count as work in England or work in Spain?

If you could provide any more useful information I'd really appreciate it.

Thanks.


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 05:04
Member (2005)
English to Spanish
+ ...
How long do you plan to be here? Aug 9, 2011

I wonder whether it would be simpler and more convenient for you to keep registered in the UK and manage all your things as usual.

Changing everything does not make much sense to me if you plan to be here for a short time, or if there is any chance that you return to the UK soon for personal reasons (for instance, if the urge to be to Spain is less intense at some moment).

Now, if you are really firm about the idea of staying in Spain for an extended period of time, I reckon your best bet is by all means to hire a chartered accountant (an "asesor fiscal") to help you take care of all paperwork and to explain to you what it all is about and how to best arrange your business here.


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Steve Dreggs  Identity Verified
Local time: 04:04
Spanish to English
+ ...
TOPIC STARTER
Further questions Aug 9, 2011

Thanks for your reply Tomás. I'll be in Spain until at least May 2012. I'm going to be working as an English teacher for 12 hours a week. In my free time I'd like to work freelance. Does this count as a short period or not? And if I'm living in Spain, working in Spain, and have a Spanish bank account, won't Spanish companies ask me for my Spanish tax details? I don't know whether I can afford an accountant as I don't freelance full-time.

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Szabolcs Király  Identity Verified
Hungary
Local time: 05:04
Portuguese to Hungarian
+ ...
Certificate of residence Aug 9, 2011

Hi Steve,

Good to know: if you continue to be registered in the UK, Spanish (and Portuguese) companies will deduct some 20% of the amount on the invoice unless you present them a certificate of fiscal residence. Just a nuisance but every company will ask for it even if you have an EU VAT number.


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Bilbo Baggins
Catalan to English
+ ...
To freelance legally in Spain Aug 9, 2011

Steve Dreggs wrote:

Thanks for your reply Tomás. I'll be in Spain until at least May 2012. I'm going to be working as an English teacher for 12 hours a week. In my free time I'd like to work freelance. Does this count as a short period or not? And if I'm living in Spain, working in Spain, and have a Spanish bank account, won't Spanish companies ask me for my Spanish tax details? I don't know whether I can afford an accountant as I don't freelance full-time.


You will be resident in Spain and will be issued with a tax number (assuming the teaching work is above board). To work as a freelancer, you will have to register with Hacienda and with the Social Security (250 euros payable a month for the SS, approx, with some deduction, I believe in the early years), do an annual tax return (and maybe three-monthly declarations). There is no such thing as a part-time freelancer (i.e., you still have to pay the full whack of SS). The only option is to get some tax advice (directly from Hacienda is best) about how much you would be permitted to earn "sporadically" in combination with your main job.


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Bilbo Baggins
Catalan to English
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VAT number Aug 9, 2011

Steve Dreggs wrote:


2) Do I need to get a Spanish VAT number?

Thanks.


Once you have your tax number, this will serve as a VAT number for freelance purposes.


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Steve Dreggs  Identity Verified
Local time: 04:04
Spanish to English
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TOPIC STARTER
British Council Aug 9, 2011

I'll be teaching English as an English Language assistant in a school as part of the British Council scheme. So I think I'll be paid for my teaching into my UK bank account and my employer will be British. As regards the freelance work, I think you're right and I should speak to an expert. Is it free to discuss this at the Hacienda?

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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 05:04
Member (2005)
English to Spanish
+ ...
"Stay in the UK" Aug 9, 2011

Steve Dreggs wrote:
Is it free to discuss this at the Hacienda?

Yes, indeed. You can visit your local "Delegación de Hacienda" or call 901 33 55 33 (I don't think it is a completely toll-free number though).

Of course in Hacienda they will not contemplate the possibility for you to simply keep your freelancing business in Britain, issue British invoices with your British address if you only plan to be here for some months, but honestly that is what I would do (just my opinion, I am no chartered accountant or tax advisor), at least for simplicity.


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Steve Dreggs  Identity Verified
Local time: 04:04
Spanish to English
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TOPIC STARTER
Banking Aug 9, 2011

If I continue conducting business from the UK, can I still ask to be paid into a Spanish bank account or not? I don't want to lose out on money when my bank receives foreign money and converts it.

Thanks.


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 05:04
Member (2005)
English to Spanish
+ ...
Negligible Aug 9, 2011

Steve Dreggs wrote:
If I continue conducting business from the UK, can I still ask to be paid into a Spanish bank account or not? I don't want to lose out on money when my bank receives foreign money and converts it.

Well, that is something you will have to live with. I really think that losing a 0.5% in exchange rate and eventually exchange fees will be far more favourable than hiring an "asesor fiscal" or a "gestoría", paying bank fees for the account you would open in Spain (which of course has a maintenance fee, albeit normally not a big one), the time lost preparing and filing all documents, repeating the process in the UK when you are back there, etc. etc.

Do as you feel best for your case and of course ask Hacienda about all the requirements to get a better picture of the situation, but if I were you I would prefer to keep my life simple if your intention is not to stay in Spain for an extended time.


[Edited at 2011-08-09 16:16 GMT]


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Rosa Plana Castillón
Spain
Local time: 05:04
English to Spanish
+ ...
Careful Aug 9, 2011

Tomás Cano Binder, CT wrote:

Steve Dreggs wrote:
Is it free to discuss this at the Hacienda?

Yes, indeed. You can visit your local "Delegación de Hacienda" or call 901 33 55 33 (I don't think it is a completely toll-free number though).

Of course in Hacienda they will not contemplate the possibility for you to simply keep your freelancing business in Britain, issue British invoices with your British address if you only plan to be here for some months, but honestly that is what I would do (just my opinion, I am no chartered accountant or tax advisor), at least for simplicity.


Steve, I would recommend that you ask for advice in HMRC. As far as I know, it is not legal to be self-employed in one country if you spend more than xx days in another (I think it's 183 days). Tomás, to my mind this is not a matter of keeping things simple...

If you continue conducting your business from the UK you can ask to be paid into a Spanish bank account, indeed.

HTH!
Rosa


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neilmac  Identity Verified
Spain
Local time: 05:04
Spanish to English
+ ...
CAVEAT Aug 9, 2011

[quote]
I have a link to a good blogsite about it on my other PC, I'll post it in a bit...

[Edited at 2011-08-09 16:55 GMT]

Here you go, maybe it's not as useful for your purpose as I first thought, but I found it quite informative and entertaining too...

http://leonhunter.com/blog/?p=668

[Edited at 2011-08-09 17:14 GMT]


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 05:04
Member (2005)
English to Spanish
+ ...
OK! Aug 9, 2011

Rosa Plana Castillón wrote:
Steve, I would recommend that you ask for advice in HMRC. As far as I know, it is not legal to be self-employed in one country if you spend more than xx days in another (I think it's 183 days). Tomás, to my mind this is not a matter of keeping things simple...

As I said before, "(just my opinion, I am no chartered accountant or tax advisor)". As you have probably read, I have advised Steve to check with Hacienda and a proper advisor.


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neilmac  Identity Verified
Spain
Local time: 05:04
Spanish to English
+ ...
Not an ad, really Aug 9, 2011

Steve Dreggs wrote:

If I continue conducting business from the UK, can I still ask to be paid into a Spanish bank account or not? I don't want to lose out on money when my bank receives foreign money and converts it.

Thanks.


ING Direct is one Spanish bank account I use, as you can transfer cash online without any noticeable charges, although I've never transferred cash to the UK with that account.


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Rosa Plana Castillón
Spain
Local time: 05:04
English to Spanish
+ ...
oops Aug 9, 2011

Tomás Cano Binder, CT wrote:

As I said before, "(just my opinion, I am no chartered accountant or tax advisor)". As you have probably read, I have advised Steve to check with Hacienda and a proper advisor.


Sorry, Tomás, I didn't mean to sound blunt! I wrote my message in too much of a hurry...


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