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

Rayann, Why would you not have to pay tax in any country when all the three countries you mention are EU?  We lived in the middle east for many, many years and didn't pay tax at all, but upon arriving here in late August 2009, my husband had to pay tax to the Spanish authorities, as his emloyer (he worked for a US based company and was paid out of the US!) used a payroll agent here to ensure everything was legal.

So, even though he worked for a US based company and was paid out of the US, as we became resident here we fitted the 'criteria' for tax liability - even though we hadn't spent 183 days here!  The 183 day rule in Spain is only one of the criteria applied for tax purposes (as Roberto has mentioned earlier in this thread).

I am not a tax expert, but I'm pretty sure Ray one of those countries will want to claim you as a fiscal resident! The 183 day rule is just one criteria. But if you can get away with it and stay out of jail, good luck to you.

I believe there is such a thing as a fiscal nomad, but it must be pretty rare, and hard to get away with. I have a Canadian friend who lives and works aboard a US registered vessel based in Thailand. He genuinely has no land address (unless you can count a week or two a year in my spare room!) so he possibly qualifies. I know he doesn't pay any taxes, anyway!

rayann, in your situation you are expected to designate which country to pay tax in, I can assure you you are not exempt from paying any tax anywhere in the EU. I am sure you already know this, or you should! It could be a while before they catch up with you, if they ever do but it certainly isn't legal and could cost you dear in the end.

Rayann

Thanks for all the replies. My residential country (domicile) is uk, I will not have more than 91 days this tax year in uk. I work in holland on a 2 weeks on 3 weeks off rota I am in either UK or ES when i am off, mostly ES. In NL or ES I will not have more than 180 days to qualify for tax reasons and I am not resident in either. My accountant says why should I pay uk tax, as I am under the qualifying days to pay tax. Hard to believe no tax anywhere I know,but we will see.

. "Hard to believe no tax anywhere I know,but we will see. " It's hard to believe because it's not true! You may get away with it but it's not legal and your accountant should be advising you of that. To be honest I also think you'd be advised to keep this sort of information to yourself.
 

 Ray, I think you'll find that, just like any country, there are more than one or two criteria that qualify you as tax resident - not just how many days you reside in a country or earn money in a country.  If you are "officially resident" in the UK and are domiciled there - even if you are paid in the UK by a UK company and taxed at source, albeit posted to work overseas - then you may, as Poppyseed says, want to keep this information to yourself if you are planning to claim the tax back!!!

It's easy to google for yourself to see if you are liable for UK tax - and I would definitely question the person/entity who "reliably" advises you to claim your tax back!! 

And just to add to my previous post, my husband, during the end of 2009 when we first arrived here, was spending most of his time working in two other EU countries - he wasn't working in Spain for most of that time to the end of 2009 (the Spanish tax year).  But he, with his family, was resident here as his prime residence, making him liable to Spanish income tax.

This message was last edited by Pitby on 15/02/2012.

Rayann

Where is your main home?  If you have a spouse and/or children where do they live ?

Sorry ask personal questions but you seem to just a ‘little evasive’ on some points.  Myself and others here are doing our best to answer your post.

Johnzx, I have said twice I live in UK, Prime residence. so I am not being "evasive"  No family in Spain. Family UK.

Thanks again for all the constructive replies. I agree, too much information given out. So me signing out.

Adios amigos,

A tax exile.....

Hi John, no problem, not upset. I know it's a strange one, and hard to believe. So IF I can actually claim it back it will be invested for 7 yrs so if they ask for it back in that time I can give it back.

Cheers.

I was actually in a similar situation a few years ago and in fact have often lived or worked outside the UK. The last time I used to commute to Italy during the week. The test for Italy and most tax jurisdictions in 183 days. The other test is "center of economic interest". HMRC will always presume you to be resident unless you can prove otherwise. They will also want to look at foreign sourced income and assess whether it has been taxed at source or not. The usual test for them is whether ones family is still ordinarily resident in the UK. They also expect one to sell ones house and chattels, unless you can prove residency has been attained elsewhere. For the first year one needs to be in UK less than 90 days.

I did retain UK tax status.

One has also to be very careful keeping records. Days of arrival and departure also account.

This message was last edited by gcarton on 17/02/2012.

Do not worry "Tax Nomad"......There is such a situation. Both my husband and I were in the Merchant Navy....employed by a UK shipping company but always abroad. Our home was in th UK, which we owned.

We would have to spend X amount of days outside the UK (which we did, due to the nature of the employment) to be able to claim ALL OUR TAX BACK!!!!

Our residency was UK and we did pay tax there but the whole lot was refunded (via Seatax Accountants) in Doncaster. I believe a similar rule applies to oil rig workers.

I think you need to be resident for tax purposes in UK but you should be able to reclaim the entire amount.

There are quite specific rules that apply to seafarers which certainly do not apply to rayann or anyone else living and working within the EU.

Forgot to inlude the link
 

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/IncomeTax/Taxallowancesandreliefs/DG_078394