autonomo

Hi,

I am a self employed builder here in Spain and I pay 278euro per month autonomo. I have been told the government are going to change this to 90 euro per month. Could someone tell me if this is true. 

I am hoping it is as I am really struggling to pay this every month, to the fact that I am thinking of opting out of the system, I know this would be illegal but I am just not making enough money to pay it every month.

I am situated on the Costa Blanca north. I would really appreciate some advice on what to do

Regards

tlc

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 I did a google and found this site that makes no reference to any changes. Maybe you could email them?

Guy

http://www.advoco.es/advice.html

 

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At the moment, there are no changes. We are waiting for the announced reforms of the Government in this sector to be made public. No worries a post on this will be made then.

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 i opted out of the system after 7 years of Legal self employment here in Spain, I now pay private medical cover and am under contract to work in Spain by a company based in the Isle of Mann. They invoice for me and charge 5% of the invoice they then send me 95% of the invoice direct to my bank. I am responsible then for a tax return at the end of each year. No more paying 256 per month social, no more IVA no more accountants fees every month! Just private health care at 52 euros per month and a 5% admin fee and it is legal. I can continue my business without the stress of knowing i need to pay those bloody fees every month.  

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Of course, you can do whatever you want to do, but please, don't mislead people by saying it is legal because it is not. If you work in Spain, you have to pay social security contributions, charge VAT on the invoices to customers and pay income tax. Using an Isle of Mann company means you have to pay social security in a different way, not as autonomo, but pay it you must. The same goes for VAT. Your income is still taxable in Spain under income tax.

Additionally, for having an employee working the Spain, the Isle of Mann company is running the risk of being deemed to have a permanent establishment in Spain and having to pay Company Tax.

The more you work, the higher the risk of being caught. Good luck.

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How does that work then lobin? If an IOM or a UK registered company is making tax returns  to UK or IOM and is home registered for VAT and pays corporation tax, how can it be classed as Spanish and be forced to pay dual taxes? If this is the case then every international company would have to pay taxes in each country they have representation in, run several different VAT/IVA systems and spend more time accounting than selling or manufacturing. Doesn't matter if it's Mr. Branson or Mr.Smith, the whole point of the EU is to trade with other member countries with no barriers or added taxes

 

Woodbug

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Hi, Woodbug.  The rules to determine country of taxation are complex but I will try to see if I can simplify them a bit.

 If a company is registered in the UK, it can derive income from Spain in several different ways and the tax regime depends on how it operates.  If it is not established in Spain (for example the company sells to Spanish customers but not in Spain but from the UK) it will not be taxed in Spain, only in the UK.  On the other hand, if the company has employees located in Spain and these employees conclude sales in Spain, then it may be deemed to have a permanent establishment in Spain and subject to Spanish Company Income Tax on the profits of the establishment.  The method to avoid double taxation in this latter case depends on the Tax Treaty between the UK and Spain.

According to Articles 7 and 24 of this Treaty, the taxes paid by the UK company on the profits obtained by the permanent establishment in Spain are credited against the UK tax so that no double taxation exists.

VAT follows different rules and depends on whether the business in Spain are sales of products or services.  Services are mostly taxable in the place where they are rendered so if the employee of the UK company renders services in Spain, Spanish VAT becomes payable.  

There are really no barriers or added taxes.  These rules, both for Company Tax and VAT are complex but their purpose is to determine in which of the two countries the profits and sales of products and services will be taxed because, as you rightly say, they are taxed in only one of them, but the rules to determine which country gets the tax are quite complex.  May tax advisors make their livelihood out of this complexity.

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Where the heck did you find healthcare for 52 bucks a month?

On the SS thing, a lot of people (me included) pay only a few months a year, enough to fly under the radar and then simply declare their income at the end of the year and pay the appropriate taxes. Will this still work with the goverment desperate to get it's hands on as much mon as possible I don't know, but if the choice is between paying your rent and paying SS I'd opt out for a bit.

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 yes it is legal i am emplyed as a contractor for a company outside spain who contract my services to buisness here in spain. I do not have to pay SS in spain as i am not employed here. I suggest you read up on contract law.

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Well it appears that we once again ‘accept’ that the anomalous EU rules are what each separate country in the union tells us they are. Each country interprets many of them to suit its own purpose, France and Spain being prime examples.

I am aware that there are many ‘experts’ in Spain allegedly looking after the poor, helpless Brit ex-pats money for them along with the host of other ‘professionals’ who have their fingers in the money pie, such as lawyers, agents and other titled fiscal advisors.

All it takes is clarification of a personal or entity tax status from the UK Customs and Excise in writing and if any other EU country decides they want a bite of the cherry, let them sort it out with the UK                        Simples!  

Of course it goes without saying that any UK based business would have a UK bank account which prevents the Spanish authorities robbing an account without the owner’s knowledge – this is another example of why Spain has got it all wrong again. If Spain expects money deposits and investment then assurances and security measures need to exist along with integrity and credibility, all of which are sadly lacking in the Spanish business arena.

 

Woodbug

 

 

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Hi,,

    Very interest comments

    as last week,,,we were out in Spain viewing properties with the view to possibly move out permanently,,,theres obviously lots to consider

    Hard enough trying to find a property,,,then confirming there are no issues ongoing with the property (pain in the arse) then finding a lawyer that is trustworthy

    Finally by the sounds of it everyone is in it for themselves when it comes to the honeypot

  

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 New Law coming.. let´s wait and see

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 yes it is legal i am emplyed as a contractor for a company outside spain who contract my services to buisness here in spain. I do not have to pay SS in spain as i am not employed here. I suggest you read up on contract law.

I think you are hoping & dreaming.

 

If , whilst employed, contracted, whatever you flew in to spain, worked & went that would be correct. The fact that you live here would in itself render you liable to all spanish tax/vat , etc; by virtue of being your 'centre of economic interest' .

Unless you have it in writing from the Hacienda then I would suggest that you keep your head down. Even I , someone who will exploit the slightest ambiguity, knows that there is not even the slightest chance of being able to argue your way out of that if you get caught !

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 New law for young autonomos approved - flat rate of €50 a month for men upto 30 years of age and women upto 35 years of age for the first six months of business. Starts being applied next Sunday. 

What about the rest?

 

Go to article

 

This message was last edited by eos_ian on 22/02/2013.

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 IMHO they have missed a golden opportunity for true reform of the labour market. The black market will continue to thrive while Autonomo rates are absurdly high. If you compare starting a business in the UK - Class 3, No VAT under 60k is it these days?

Juan

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You're absolutely right Juan. The system is crippling the freelance workers and professionals and forcing many to avoid payments. I hope they decide to take it a step further but as autonomos make up a massive proportion of the country's workforce I would imagine any reductions would have a large impact in the short term SS revenue. It is a problem that needs to be dealt with a long term vision.

 

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What's the thinking with the age discrimination (probably against EU law) I can't for the life of me think of a good reason for not making this law for any NEW start up autonomo!. Introducing IVA registration thresholds for small business's  would also be a great step forward, Juan, it's 77k from 2012 in the UK

 

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