Working in Gib, living in Spain - who do we pay tax to?

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19 Jan 2012 12:00 AM by emjharts Star rating. 33 posts Send private message

 We will soon be moving to Spain. My Husband will be working in Gibraltar so we are wondering who we pay tax to? Most people have said you pay tax in the place that you work but then surely the Spanish will want some sort of tax for us living there?

Also, where will we be entitled to healthcare? Spain or Gib or is it best to just take out private healthcare?

help, this all confuses me!





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19 Jan 2012 7:41 PM by plummet Star rating. 1 posts Send private message

 Hi there , 

The short answer is both - you will have tax deducted in Gib under the paye system , and , as a resident in spain you will be liable for income tax on your worldwide income in Spain too . 

I understand that you will then be able to set off the tax paid in Gib against your Spanish tax bill -

You need to take advice on this both in Spain and in Gib





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19 Jan 2012 11:49 PM by EOS Team Star rating in In Spain of course!. 4015 posts Send private message

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I know a lot of people have bank accounts in Gib and are paid into those bank accounts.  They then withdraw the cash when they get paid, change it to Euros and bring it over the border.

How they fill in their tax declaration in Spain I have no idea

Justin



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26 Jan 2012 5:43 PM by mariadecastro Star rating in Algeciras (Cadiz). 9376 posts Send private message

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 Income tax you mean?



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26 Jan 2012 5:49 PM by emjharts Star rating. 33 posts Send private message

 Yes, income tax. Can you help?





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26 Jan 2012 6:00 PM by mariadecastro Star rating in Algeciras (Cadiz). 9376 posts Send private message

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 Income tax in Spain is for residents.

There is an obligation to pay non-resident income tax in Spain if you own property here.

Your work incomes wouldf be taxed depending on this... I guess you are a Uk resident if you work there

 



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26 Jan 2012 6:01 PM by emjharts Star rating. 33 posts Send private message

 We are from UK yes, and we will just be renting a house in spain for the time being and so what if anything would we need to pay in Spain?





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26 Jan 2012 6:50 PM by Roberto Star rating in Torremolinos. 4556 posts Send private message

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There are rules regulating cross border workers in the EU e.g. where someone lives in one country but works in a neighbouring one, such as Spain & France, to ensure they don't have to pay tax twice. Gibraltar is not part of the EU, but there do appear to be certain similar allowances. A quick Google turned up this site: http://www.category2.com/international_tax2/Gibraltar_Cross_border_tax.html

I would suggest that whoever your husband will be working for should be able to advise more on this subject - chances are he will not be the only employee in this situation. A huge number of workers in Gib live in Spain, so it shouldn't be too hard to find out what they do. Apparently nobody here on EOS has personal experience though.



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03 Feb 2012 7:33 AM by el romeral Star rating. 21 posts Send private message

I have worked for 13 years on the rigs in Norway whilst living in Spain. I have only ever paid income tax to Norway. No income tax is paid to Spain. I would imagine the same principle would apply here?





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03 Feb 2012 11:18 AM by Roberto Star rating in Torremolinos. 4556 posts Send private message

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What do you mean by "living in" Spain? Where are you officially resident? If Spain, I presume you file an annual tax declaration here? Maybe there is a double taxation treaty between Norway & Spain which means you do not then have to pay tax here as well?



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03 Feb 2012 11:43 AM by el romeral Star rating. 21 posts Send private message

I am officially resident in Spain - where my home is. I've never filed any tax declaration to Spain. There is some form of a treaty between the countries so that I do not have to pay tax twice.





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03 Feb 2012 6:03 PM by Roberto Star rating in Torremolinos. 4556 posts Send private message

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"I am officially resident in Spain - where my home is. I've never filed any tax declaration to Spain."

I think if I were you I would not broadcast such an admission on a public forum. You should not have to pay tax in two countries with an agreement, but you should definitley file an annual declaration in Spain of all your worldwide income.

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04 Feb 2012 4:02 AM by johnzx Star rating in Spain. 5243 posts Send private message

QUOTE El Romeral
I am officially resident in Spain - where my home is. I've never filed any tax declaration to Spain. There is some form of a treaty between the countries so that I do not have to pay tax twice.
 
Then you are in big problems.
 
 
If you are resident in Spain, you MUST declare your worldwide income in Spain.
 
(An exception is for Brits, maybe others too, who have a government employee pension, police, army etc, that is ONLY taxable in UK. As too believe is income from letting a property in UK)
 
The double taxation agreements do not let you choose where to pay your tax but prevent you having to pay in two jurisdictions. So for example, if you pay tax in Spain on you OAP you will not pay again in UK.





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04 Feb 2012 12:26 PM by el romeral Star rating. 21 posts Send private message

The reason I do not need to declare to Spain, is that I spend more than 180 days per year out of Spain. Stand easy chaps.

Sorry, to OP as this is not really the same situation as you will be in. Good luck.





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04 Feb 2012 12:57 PM by Roberto Star rating in Torremolinos. 4556 posts Send private message

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Confused.com. So you pay the non-resident tax on your property in Spain? I'm no expert on this, but I think the 183 day rule is just one of the criteria for establishing residency, and you yourself stated that you are "officially resident in Spain - where my home is". Even if you spend more than 180 days out of the country, you may still be considered resident if for example your family live here. And as far as I was aware, all residents must make a tax declaration, even if it is "zero"?



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09 Feb 2012 1:15 PM by DMS Star rating in Spain. 27 posts Send private message

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Taxes are paid in the country of your place of residence. This means that if you live for more than 183 days in Spain you are considered a tax Resident in Spain and therefore are obliged to make a tax declaration stating your worldwide income to the Spanish Tax Office.

Regarding Health care you would have to be registered in the Spanish health system as an employed or freelance worker. 

 

 



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09 Feb 2012 5:55 PM by seetokui Star rating. 4 posts Send private message

Tax residency is a very complex subject. Even accountants that specialise in international tax law cannot agree. Neither can tax authorities. Mine says he can argue any position.



This message was last edited by seetokui on 09/02/2012.



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10 Feb 2012 4:27 AM by johnzx Star rating in Spain. 5243 posts Send private message

I seem to remember when some new legistation was issued re tax in EU (maybe even 10 years ago), there were specific exceptions for  people who worked and lived in different countries generally, returning home every day, say worked in Spain, but lived just north of the border in France.
 
I have not had the time to research this, but, if I am correct, it would mean the straightforward (hahaha !!! ) rules we normally quote, 183 days etc may not apply in such cases.





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10 Feb 2012 7:04 PM by Roberto Star rating in Torremolinos. 4556 posts Send private message

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My previous post:

There are rules regulating cross border workers in the EU e.g. where someone lives in one country but works in a neighbouring one, such as Spain & France, to ensure they don't have to pay tax twice. Gibraltar is not part of the EU, but there do appear to be certain similar allowances. A quick Google turned up this site: http://www.category2.com/international_tax2/Gibraltar_Cross_border_tax.html



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13 Feb 2012 10:30 PM by rayann Star rating in Terreros & South Shi.... 79 posts Send private message

Hola folks,

Interesting discussion this one for me..... My situation - I officially live in UK and my employer is based in UK. I am currently posted to Holland. I have a second home in Spain. I will not have more than 91 days in Uk or 180 days in Spain or Holland. I have been reliably informed to claim my UK tax back for this current tax year after April. I am not liable for tax in any country. Any comments on this would be welcome.

I hope you all get suitably sorted on your taxation journeys.

Muchos gracias y hasta luego,

Ray





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