How to do taxes while remote working from Spain

Solve your questions about how to do taxes while remote working from Spain.

First of all, the good news is that if you spend less than 183 days (6 months) in Spain in a natural year, you don’t need to worry about taxes, since your country of residence for tax purposes is going to still be your country of residence.

 

Differences between Europeans and non-Europeans?

Europeans can travel without Visa restrictions in Europe. So they can come to Spain and stay up to 3 months without needing to do any bureaucracy. However, if Europeans plan to stay longer, they should apply in person to the Immigration Office for registration in the Central Register of Foreign Nationals (‘Registro Central de Extranjeros’), by appointment.

Even if you are not European, you can come to Spain for up to 2 years straight with a Non-lucrative Visa. Meaning that you don’t have the right to work in Spain. But you can work remotely for another company abroad. More info can be found here about how to work remotely from Spain as a non-European.

 

Freelancing

Being a freelancer in Spain is rather easy. For EU citizens it suffices with your passport (or your national ID card) and a NIE. A freelancer in Spain is what we call “autónomo”. It costs a flat rate of 60 euros a month the first year. And it gradually increases until the third year where it can range between 280 to 350 depending on the region. Check this post about how to get a NIE, and this one if you are in the Canary Islands.

 

Invoicing as a freelancer

Regarding invoicing as a freelancer, sales taxes don’t apply the same in the whole Spanish territory. In Canary Islands the VAT works a bit different. According to WorkFromGranCanaria, since the Canary Islands are outside the EU VAT area, you don’t have to collect Spanish VAT on your invoices. Instead there is a similar sales tax called IGIC, with a rate of 6.5%. This IGIC applies to sales to: customers based in the Canary Islands, private individuals based out of the EU, any customer that consumes your services/products in Canarian territory. If your customer is another Spanish (peninsular) freelancer or business, you also need to apply an additional 15% tax on your invoices.

Regarding invoicing to countries outside Spain, at Quaderno we can find the map of when to apply VAT. When making invoices to the USA or any country outside the EU, we don’t include the Spanish VAT, aka IVA. This includes when billing to companies and individuals on certain services, e.g. licensing, patents, marketing, counseling, auditing and lawyers… Other kinds of products sold to individuals outside the EU should include VAT.

Debitoor tells us about how to include IVA when billing to countries inside EU. Since different countries have different VAT rates, these should only be paid in one country, to avoid double taxation. But remember than when invoicing to companies in the USA or other non-European countries, invoices don’t need to include sales tax (VAT)

 

Conclusion

Spain is a target country to remote-work: great weather, great food, and no paperwork for European employees if they stay less than 3 months in the country. Freelancing from Spain is also relatively easy. In a future post, we will explain how to do income taxes for people who want to move to Spain for the whole year. Recall that income tax does not apply until the person stays 6 months in Spain in a natural year. Anything below that, no tax changes from your country of residence.

We hope you enjoyed this blog post, but we remind you that this is for informational purposes only. Be advised that sales tax rules and laws are subject to change at any time. For specific sales tax advice regarding your business, please contact a professional tax advisor.

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