Do I have to register and pay taxes in Spain if I'm a remote worker?
With the rise of remote working, many foreigners are looking to move to Spain whilst holding on to their jobs back home. But do you have to register and pay taxes in Spain if you're working here remotely? Here's everything you need to know.
Picture this - your company has decided that you no longer need to go back to the office after the Covid-19 pandemic and you can continue to work remotely from wherever you want, perhaps from another country.
You may decide to move to Spain, attracted by its good weather, great food, lower cost of living and many other perks, including the fact that already having a job resolves one of the major obstacles of living in the country.
However, this is where it gets complicated and you start asking questions – do you have to register and pay tax in Spain if you’re working remotely and is tax already deducted from your salary in the country where you previously lived and worked?
Many people are confused by this and online forums are filled with comments claiming that they don’t need to pay tax because they’re not working for a Spanish company or don’t have any Spanish clients.
So do remote workers whose work has nothing to do with Spain have to pay tax in Spain?
In short, the answer is yes. If you live in Spain for more than 183 days, you must pay tax here. Regardless of where your company or clients are based, if you are physically living in Spain and working from here, you are liable to pay tax.
On their website, the Spanish government states that if you’re resident in Spain you “must pay tax in Spain on your worldwide income, i.e. you must declare in Spain income obtained in any part of the world”.
But what if I’m already taxed on my salary back in my home country?
If you have a permanent remote job, you may already be paying tax on your salary back in your home country. Technically though, if you no longer live in that country, you shouldn’t be paying tax there. You should really only be paying tax in Spain if you decide to move here.
While Spain does have double taxation agreements with several countries, including a treaty for the avoidance of double taxation with the UK and the US, you are still expected to declare your income in Spain.
How do I register legally as a remote worker in Spain?
As Spain’s digital nomad visa is still not up and running yet, and all the details of how this will work haven’t been released by the Spanish government, there are currently limited options of how to legally register and pay taxes as a remote worker in Spain.
Below we outline the options for EU and non-EU citizens.
EU citizen
If you’re an EU citizen, you can simply move to Spain without the need for a visa. However, you will need to register your residency here within the first three months. One of the easiest ways of declaring the income you earn from your remote job is to register as self-employed or autónomo.
Ideally, your company would stop paying you a salary with the tax already deducted and you would simply invoice your company every month for your wage. You would then be responsible for declaring and paying your own taxes.
As an autónomo, you will declare and pay your taxes every three months. You will then also have to submit an annual tax declaration in June each year.
You should be aware that as an autónomo in Spain you will more than likely pay more taxes on your remote income than you did back in your home country. This is partly because of the higher social security fees you will be charged, regardless of how much you earn. Currently, it's €294 per month (€60 for the first year and working progressively up to €294 over the course of the second year).
The income tax bands also mean that you may end up paying more personal income tax in Spain as well, particularly if you are a low to mid-earner.
READ ALSO - Self-employed in Spain: What you should know about being ‘autónomo’
Of course, not all companies are happy to do this, so you will need to speak with them and see what your options are. You should also talk to a gestor or tax advisor in Spain for your particular situation to see if there is another option of declaring your income here.
This could include creating a subsidiary company here and being paid a salary from that company, or finding an international accounting company that could arrange for you to be paid as a Spanish employee. Again, thess options are not necessarily available to most remote workers.
READ ALSO: What does a ‘gestor’ do in Spain and why you’ll need one
Non-EU citizen
If you’re from a non-EU country, you first have the challenge of getting a visa to legally be allowed to live in Spain for longer than 90 days, even before you start thinking about how to register as a remote worker and if you need to pay tax on your income.
Unfortunately, there’s currently no visa that allows you to simply move to Spain and work remotely. As mentioned above, Spain’s digital nomad visa is still not in operation yet. Here’s everything we know about it so far.
For a working visa, you have to be offered a job in Spain and be sponsored by a company that can prove that the job can’t be filled by someone else in the EU. For an entrepreneur visa you have to set up a business in Spain with an economic interest for the country and with a student visa, you’re only allowed to work 20 hours a week.
READ ALSO - Worker, retiree or investor: What type of Spanish visa do I need?
One option is the Golden Visa, which will allow you to work in Spain and register as an autónomo like above, but the catch is that you’ll have to have a spare €500,000 to spend on a property here before you can.
Many people mistakenly believe that they can work remotely on the Non-Lucrative Visa or NVL, however as the name suggests you can’t work on this visa. As mentioned above, the Spanish government says that you have to declare tax on your worldwide income, so if you continue to work for your company or clients abroad during this time and get found out, you could incur hefty fines.
Particularly since the start of the Covid-19 pandemic and the rise in remote workers, Spanish consulates have been rejecting NVL applications from anyone they believe might be trying to continue working remotely while they’re here.
If you don’t have €500,000, one of the best options is to apply for the NVL and take a sabbatical from your job for a year or quit your job when you move here.
Then after the year is up, you can exchange your visa for a different residency permit that allows you to become self-employed (autónomo). You can then start working remotely for your company again if you’ve been on sabbatical or apply for a new remote job and start working and declaring your taxes legally in Spain.
See Also
Picture this - your company has decided that you no longer need to go back to the office after the Covid-19 pandemic and you can continue to work remotely from wherever you want, perhaps from another country.
You may decide to move to Spain, attracted by its good weather, great food, lower cost of living and many other perks, including the fact that already having a job resolves one of the major obstacles of living in the country.
However, this is where it gets complicated and you start asking questions – do you have to register and pay tax in Spain if you’re working remotely and is tax already deducted from your salary in the country where you previously lived and worked?
Many people are confused by this and online forums are filled with comments claiming that they don’t need to pay tax because they’re not working for a Spanish company or don’t have any Spanish clients.
So do remote workers whose work has nothing to do with Spain have to pay tax in Spain?
In short, the answer is yes. If you live in Spain for more than 183 days, you must pay tax here. Regardless of where your company or clients are based, if you are physically living in Spain and working from here, you are liable to pay tax.
On their website, the Spanish government states that if you’re resident in Spain you “must pay tax in Spain on your worldwide income, i.e. you must declare in Spain income obtained in any part of the world”.
But what if I’m already taxed on my salary back in my home country?
If you have a permanent remote job, you may already be paying tax on your salary back in your home country. Technically though, if you no longer live in that country, you shouldn’t be paying tax there. You should really only be paying tax in Spain if you decide to move here.
While Spain does have double taxation agreements with several countries, including a treaty for the avoidance of double taxation with the UK and the US, you are still expected to declare your income in Spain.
How do I register legally as a remote worker in Spain?
As Spain’s digital nomad visa is still not up and running yet, and all the details of how this will work haven’t been released by the Spanish government, there are currently limited options of how to legally register and pay taxes as a remote worker in Spain.
Below we outline the options for EU and non-EU citizens.
EU citizen
If you’re an EU citizen, you can simply move to Spain without the need for a visa. However, you will need to register your residency here within the first three months. One of the easiest ways of declaring the income you earn from your remote job is to register as self-employed or autónomo.
Ideally, your company would stop paying you a salary with the tax already deducted and you would simply invoice your company every month for your wage. You would then be responsible for declaring and paying your own taxes.
As an autónomo, you will declare and pay your taxes every three months. You will then also have to submit an annual tax declaration in June each year.
You should be aware that as an autónomo in Spain you will more than likely pay more taxes on your remote income than you did back in your home country. This is partly because of the higher social security fees you will be charged, regardless of how much you earn. Currently, it's €294 per month (€60 for the first year and working progressively up to €294 over the course of the second year).
The income tax bands also mean that you may end up paying more personal income tax in Spain as well, particularly if you are a low to mid-earner.
READ ALSO - Self-employed in Spain: What you should know about being ‘autónomo’
Of course, not all companies are happy to do this, so you will need to speak with them and see what your options are. You should also talk to a gestor or tax advisor in Spain for your particular situation to see if there is another option of declaring your income here.
This could include creating a subsidiary company here and being paid a salary from that company, or finding an international accounting company that could arrange for you to be paid as a Spanish employee. Again, thess options are not necessarily available to most remote workers.
READ ALSO: What does a ‘gestor’ do in Spain and why you’ll need one
Non-EU citizen
If you’re from a non-EU country, you first have the challenge of getting a visa to legally be allowed to live in Spain for longer than 90 days, even before you start thinking about how to register as a remote worker and if you need to pay tax on your income.
Unfortunately, there’s currently no visa that allows you to simply move to Spain and work remotely. As mentioned above, Spain’s digital nomad visa is still not in operation yet. Here’s everything we know about it so far.
For a working visa, you have to be offered a job in Spain and be sponsored by a company that can prove that the job can’t be filled by someone else in the EU. For an entrepreneur visa you have to set up a business in Spain with an economic interest for the country and with a student visa, you’re only allowed to work 20 hours a week.
READ ALSO - Worker, retiree or investor: What type of Spanish visa do I need?
One option is the Golden Visa, which will allow you to work in Spain and register as an autónomo like above, but the catch is that you’ll have to have a spare €500,000 to spend on a property here before you can.
Many people mistakenly believe that they can work remotely on the Non-Lucrative Visa or NVL, however as the name suggests you can’t work on this visa. As mentioned above, the Spanish government says that you have to declare tax on your worldwide income, so if you continue to work for your company or clients abroad during this time and get found out, you could incur hefty fines.
Particularly since the start of the Covid-19 pandemic and the rise in remote workers, Spanish consulates have been rejecting NVL applications from anyone they believe might be trying to continue working remotely while they’re here.
If you don’t have €500,000, one of the best options is to apply for the NVL and take a sabbatical from your job for a year or quit your job when you move here.
Then after the year is up, you can exchange your visa for a different residency permit that allows you to become self-employed (autónomo). You can then start working remotely for your company again if you’ve been on sabbatical or apply for a new remote job and start working and declaring your taxes legally in Spain.
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