| Pages in topic: < [1 2] | (Tax) bureaucracy in Spain: save me! Thread poster: Lia Fail (X)
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John Rawlins 
Spain
Local time: 09:29
Spanish to English
+ ...
| A couple of kids | Jun 30, 2009 |
Lia Fail wrote:
I have a similar income and I PAY around 4000!!!!
Do you make deductions for dependents?
I've collected a couple of kids and a mortgage. I don't claim for the mortgage because I am already claiming relief on the mortgage interest as it is my home. I have the feeling that if also claim the mortgage as a business expense, then I may lose my right to not pay capital gains tax when I eventually sell.
| | | | RobinB
United States
Local time: 02:29
German to English
| It sounds pretty awful down there in Spain... | Jun 30, 2009 |
I suppose you can have either a good climate *or* a fair tax system, but not both. At least in Europe.
In the chart referred to by Williamson, Germany must be **much** further down the list as far as freelance translators are concerned. There's as good as zero bureaucracy involved in setting up as a translator in the first place, the tax rates are still reasonable, and - above all - there are no social security payments whatsoever to make! (Freelance professionals are responsible fo... See more I suppose you can have either a good climate *or* a fair tax system, but not both. At least in Europe.
In the chart referred to by Williamson, Germany must be **much** further down the list as far as freelance translators are concerned. There's as good as zero bureaucracy involved in setting up as a translator in the first place, the tax rates are still reasonable, and - above all - there are no social security payments whatsoever to make! (Freelance professionals are responsible for their own health and pension insurance arrangements, the cost of which is then partly tax-deductible).
And you're a cash-basis taxpayer, unlike what appears to be an accrual-basis regime in Spain (though there seems to be some confusion about this issue). This means that you pay tax on what you've actually received, not on what you've invoiced. It's what goes in and out of your bank accounts that matters, so the question of which tax period your client reports the payment is entirely irrelevant. Accrual-basis accounting is fine for companies above a certain size, because they can also expense invoices received on the date of receipt. That makes sense for companies that have a lot of expenses, but little sense for freelances, who typically have a much lower level of expenses than companies. What an appalling set up you have in Spain! Good thing the weather's better. And the beaches. And the red wine. And the food... ▲ Collapse
| | | | Ana Cuesta
Spain
Local time: 09:29
Member
English to Spanish
| Are we mixing concepts here? | Jun 30, 2009 |
Lia Fail wrote: John Rawlins wrote:
Last year I declared an income of just over €35,000 and the taxman returned me €4001 in August. My tax and social security works out at just over 25% of gross income - which I believe is pretty low by European standards. I usually overpay by 2000-3000 euros every year and this makes a nice summer 'bonus'. I have a similar income and I PAY around 4000!!!! Do you make deductions for dependents?
Do you (Lia/John) make fractionated payments each term (as you are obliged to do if something like 70% of your income comes from abroad and so is not subject to retention) or just depend on retentions by Spanish customers to advance money to Hacienda? That can make a whole of a difference in terms of June's liquidation, even if at the end of the day you end up paying the same amount over the year...
| | | | John Rawlins
Spain
Local time: 09:29
Spanish to English
+ ...
| What! No bonus? | Jun 30, 2009 |
Ana Cuesta wrote:
Do you (Lia/John) make fractionated payments each term (as you are obliged to do if something like 70% of your income comes from abroad and so is not subject to retention) or just depend on retentions by Spanish customers to advance money to Hacienda? That can make a whole of a difference in terms of June's liquidation, even if at the end of the day you end up paying the same amount over the year...
I just make quarterly declarations based on invoices issued - in the usual way. As most my income comes from Spain and is subject to retention, I suppose I could do just one annual income declaration. But then I would miss out on my summer 'bonus'.
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John Rawlins
Spain
Local time: 09:29
Spanish to English
+ ...
| Spain isn't Germany | Jun 30, 2009 |
RobinB wrote:
That makes sense for companies that have a lot of expenses, but little sense for freelances, who typically have a much lower level of expenses than companies. What an appalling set up you have in Spain! Good thing the weather's better. And the beaches. And the red wine. And the food...
You are right Robin. Spain isn't Germany. Bureaucracy, like fungal infections, does seem multiply as the temperatures rise. There is something about the Mediterranean that somehow repels organisational simplicities. The rulebook in the south just has more pages.
| | | | Lia Fail (X)
Spain
Local time: 09:29
Spanish to English
+ ...
TOPIC STARTER | answer to Ana | Jun 30, 2009 |
[quote]Ana Cuesta wrote:
Lia Fail wrote:
Do you (Lia/John) make fractionated payments each term (as you are obliged to do if something like 70% of your income comes from abroad and so is not subject to retention) or just depend on retentions by Spanish customers to advance money to Hacienda? That can make a whole of a difference in terms of June's liquidation, even if at the end of the day you end up paying the same amount over the year...
No, I pay it all in 15% on each bill, then a lump payment divided between Nov and June.
I got a second opinion a year ago, and the second gestor confirmed that the amount was right. It actually amounts to around 20% of my income before deductions, and about 25% after deductions (my docs are with the gestor at the moment so I can't check).
I don't declare any dependents, that's possibly the difference.
| | | | | Hm... I may have to put my German citizenship to work | Jun 30, 2009 |
RobinB wrote:
And the beaches. And the red wine. And the food...
I hate sand. I quite enjoy Spätlese. And German home-cooked food is usually very good. Or maybe I like it because I grew with it.
You really make me want to research about putting my German citizenship to work and claim my income tax over there instead of here! :-/
Know any good tax adviser I could talk to?
| | | | RobinB
United States
Local time: 02:29
German to English
| I said "red wine" | Jun 30, 2009 |
Tomás Cano Binder, CT wrote: I hate sand. I quite enjoy Spätlese.
Germany isn't exactly known for the high quality of its red wines. OK, there are a few around the Kaiserstuhl plateau further south from here that can be quite spectacular, but they're very much the exception. The rest never make it outside Germany, and there's a good reason for that. OTOH, German whites have improved incredibly over the past 10 years or so, and many of them are now among the world's best wines in every price category. Pity about the crap international marketing.
And German home-cooked food is usually very good. Or maybe I like it because I grew with it.
I presume you mean the sort of home-cooked food that gets home-cooked max. once a week, or often only once a month. Or do you actually mean vast quantities of chemically enhanced dead pig that's so cheap they must be selling it below cost, accompanied by frozen fries and tinned veg?
You really make me want to research about putting my German citizenship to work and claim my income tax over there instead of here!
Different rules for Auslandsdeutsche. They're always treated as tax evaders
Robin
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Williamson
United Kingdom
Local time: 08:29
Flemish to English
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| La Hispanidad | Jul 1, 2009 |
There used to be a member on this site, who lived +181 days in Bermuda and the rest in Italy. I wonder why? If you can't miss your country, why not take the best of both world and go and live say in the Dominican Republic (there are translators of Belgian origin Be-translated (?)working there- it must be sunnier than in Belgium and tax-friendlier too) for +181 days?
Viva la hispanidad. Be a pirate of the Carribean.
Talking about the Carribean, I am looking for tax-information ... See more There used to be a member on this site, who lived +181 days in Bermuda and the rest in Italy. I wonder why? If you can't miss your country, why not take the best of both world and go and live say in the Dominican Republic (there are translators of Belgian origin Be-translated (?)working there- it must be sunnier than in Belgium and tax-friendlier too) for +181 days?
Viva la hispanidad. Be a pirate of the Carribean.
Talking about the Carribean, I am looking for tax-information on these parts of the world. It seems that the Dutch Antilles have a tax-rate of 2%.
What about the other islands in the sun?
About Europe: As always useful information can be found on the websites of the E.U.:
http://ec.europa.eu/youreurope/business/countries/spain/index_en.htm
[Bijgewerkt op 2009-07-01 09:11 GMT] ▲ Collapse
| | | | | Spanish pirates?? Don't think so. | Jul 1, 2009 |
Williamson wrote:
Viva la hispanidad. Be a pirate of the Carribean.
Actually may I just mention that the pirates were not the Spaniards, and that Spanish vessels rarely practiced piracy, unlike the English, for instance. If any Spaniard of that time had "piracitical" inclinations, they joined an English, Dutch, or Portuguese crew.
Although I might have misunderstood your statement completely!
| | | | Williamson
United Kingdom
Local time: 08:29
Flemish to English
+ ...
| Seat of fortune | Jul 1, 2009 |
I just wanted to say that some are not so bound to their country and go and plug their computer in the wall where tax-laws are very lenient. Some chose the Carribean. In doing so, they become subject to the tax-laws of the countries where they have their seat of fortune. To have you seat of fortune somewhere you must live there physically more than a certain number of days (usually +181). That is the reason what that former (?) member went to live on the Bahamas for a part of the year and for th... See more I just wanted to say that some are not so bound to their country and go and plug their computer in the wall where tax-laws are very lenient. Some chose the Carribean. In doing so, they become subject to the tax-laws of the countries where they have their seat of fortune. To have you seat of fortune somewhere you must live there physically more than a certain number of days (usually +181). That is the reason what that former (?) member went to live on the Bahamas for a part of the year and for the rest of the year in Italy.
[Bijgewerkt op 2009-07-01 14:56 GMT] ▲ Collapse
| | | | Parrot
Spain
Local time: 09:29
Spanish to English
+ ...
| Isn't anyone paying a pension plan? | Aug 7, 2009 |
I know, I know, as soon as you draw on it, it gets taxed. But I'm doing it anyway because it might be worth a possible sabbatical, if and when I get fed up
The deductions can contribute heftily to the difference John states (in tax returns).
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Zoe Green
Italy
Local time: 09:29
Spanish to English
+ ...
| If things are that bad, you need a new gestor! | Oct 2, 2009 |
I worked as autónomo for four years without any of these problems. In fact, my worst problem was and is the fact that my gestor likes to give me about 10 seconds notice that I have to go down to the office to sign something
I'm now an S.C. but nothing's really changed for me other than that I have a CIF instead of my NIE on my invoices and receipts. I just provide all invoices and receipts at the end of each quarter and th... See more I worked as autónomo for four years without any of these problems. In fact, my worst problem was and is the fact that my gestor likes to give me about 10 seconds notice that I have to go down to the office to sign something
I'm now an S.C. but nothing's really changed for me other than that I have a CIF instead of my NIE on my invoices and receipts. I just provide all invoices and receipts at the end of each quarter and the gestor deals with everything else - as he should. And that includes receipts for things like hotel rooms when I've been working away from home and work-related books etc. I have no dependents and would guess (the better half of the S.C partnership would know, but she's not here!) that the company's tax bill comes to around 25% incl. retentions on Spanish clients, which is MUCH less than I would be paying for a similar income in Germany, which is where I lived and worked previously.
You're paying your gestor so much money a month to SAVE you time and money. If he's not doing that, then you need to get a new gestor - one that you can trust. ▲ Collapse
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