Question Optimize Tax Burden (Spain) Partially Self-Employed

[savewhatyouhave]

Hey folks,
I currently live in Spain and work remotely for a US company with my compensation around $100k/yr.
With this income I'd have to pay approximately 40-45% as taxes which is too much but I'd still would like to have an "official" source of income.
So I'm thinking about becoming a self-employed and receiving let's say $30k/yr into my self-eployed bank account to pay 25%-30% taxes only from this amount. The rest $70k/yr I'd be receiving into EMIs. My company is fine splitting my paycheck into as many separate payments as needed. Any thoughts? Thank you!

 

[ecool]

Why cant a legitimate business in Seychelles hire a Spanish Consultant could you care to explain? Payment to the consultant will be in crypto.

yes they can do that. But be sure you can explain and have proper proof of everything when the tax agency from Spain contacts you with questions as from what I understand it's a clear red flag

 

[savewhatyouhave]

Why cant a legitimate business in Seychelles hire a Spanish Consultant could you care to explain? Payment to the consultant will be in crypto.

Maybe I'm mistaken but even if your salary is in crypto this still is a taxable income in Spain.

 

[ecool]

Maybe I'm mistaken but even if your salary is in crypto this still is a taxable income in Spain.

yes, crypto is taxable in Spain

 

[tolstoy]

yes they can do that. But be sure you can explain and have proper proof of everything when the tax agency from Spain contacts you with questions as from what I understand it's a clear red flag

As far as i understand OP is not willing to pay taxes on this amount- so the Seychelles IBC needs to have an agreement with the US company that it is providing services to the us company and then pay OP in crypto(maybe even in monero) into his cold wallet (nobody needs an agreement at all here apart from the above one between the us company and the seychelles company)-where exactly is the Spanish tax agency coming in-maybe you could give a detailed explanation here to clarify what you are talking about. All OP needs to do is exchange the crypto to cash in Spain for his day to day living expenses which should be easy to do if you do it with a crypto to cash guy. How exactly does the Spanish tax agency know if there is no written agreement between the OP and the Seychelles IBC?To make it even more easier for the OP and complicated for the Spanish Tax agency i would advise OP to get NHR in Portugal and then on a monthly or weekly trip encash the crypto there. Maybe after this you might suggest that the Spanish tax authorities can f**k themselves.

 

[bedouin]

Moving to Spain and expect to pay low taxes with a 6 figure salary is like going to a favela in Rio with two gold rolexes on each arm and expect to have zero issues. Just move out of there or accept the situation, there is nothing you can you about it. Why the heck do you think everyone who can, relocates?

Only giant corporations that can do the SICAV (hedge fund) scheme or companies that have physical products that are produced in Spain, or services that are for Spanish benefits (like consulting about Spanish law etc) will stay, as they have no choice.

Spain is a great place if you make a normal salary (or whats considered normal there). Otherwise be prepared to be r4ped. Do not piss their IRS off as yeah they aren't great at detecting stuff but if they do, they will not leave you alone, not ever. You may win (they lose 50% of the cases), but they will make your life extremely miserable in the process (as that's their strategy so you settle to pay before the process is carried on), and will continue to hunt you with audits every year after. And even if you do win, they will appeal to a higher court (they can do this up to 3 times) like they are doing with Xavi Alonso, who's already won twice but that won't settle it. If the loot is big enough, they will hunt down.

Stay away from Spain! Only for vacations! Or be prepared to pay 50% or more, better safe than sorry. You can NOT win against those people, you WILL lose one way or the other (economically, emotionally, mentally, etc) every single time without exception.

Regarding your question, it will not work as you think. If you create a company, for example, if you are a single shareholder, you will be taxed twice. That means your company will get taxed CT of 25%, and then you will personally be attributed 70% of those gains. So if the company makes eg 100k profit, it will pay 25% in taxes. Of the 70k remaining, 70% will be attributed to your personal income tax. This is a scandal but that's just the way it is.

 

[Mssquirrel]

I would just leave because in the long term it could be a problem, you will not go to jail as I think you have to owe 120000 euro in tax in a year for that but you don't want to not being able to have money in a bank there or not being able to have things in your name. If you don't want to leave the country maybe check move to Canary Islands or Ceuta and Melilla I heard taxes are lower there.

 

[savewhatyouhave]

Moving to Spain and expect to pay low taxes with a 6 figure salary is like going to a favela in Rio with two gold rolexes on each arm and expect to have zero issues. Just move out of there or accept the situation, there is nothing you can you about it. Why the heck do you think everyone who can, relocates?

Only giant corporations that can do the SICAV (hedge fund) scheme or companies that have physical products that are produced in Spain, or services that are for Spanish benefits (like consulting about Spanish law etc) will stay, as they have no choice.

Spain is a great place if you make a normal salary (or whats considered normal there). Otherwise be prepared to be r4ped. Do not piss their IRS off as yeah they aren't great at detecting stuff but if they do, they will not leave you alone, not ever. You may win (they lose 50% of the cases), but they will make your life extremely miserable in the process (as that's their strategy so you settle to pay before the process is carried on), and will continue to hunt you with audits every year after. And even if you do win, they will appeal to a higher court (they can do this up to 3 times) like they are doing with Xavi Alonso, who's already won twice but that won't settle it. If the loot is big enough, they will hunt down.

Stay away from Spain! Only for vacations! Or be prepared to pay 50% or more, better safe than sorry. You can NOT win against those people, you WILL lose one way or the other (economically, emotionally, mentally, etc) every single time without exception.

Regarding your question, it will not work as you think. If you create a company, for example, if you are a single shareholder, you will be taxed twice. That means your company will get taxed CT of 25%, and then you will personally be attributed 70% of those gains. So if the company makes eg 100k profit, it will pay 25% in taxes. Of the 70k remaining, 70% will be attributed to your personal income tax. This is a scandal but that's just the way it is.

I would just leave because in the long term it could be a problem, you will not go to jail as I think you have to owe 120000 euro in tax in a year for that but you don't want to not being able to have money in a bank there or not being able to have things in your name. If you don't want to leave the country maybe check move to Canary Islands or Ceuta and Melilla I heard taxes are lower there.

Thank you peeps, this all just confirms my theory that $100k/yr isn't the amount that would allow you to "optimize" taxes like millionaires or A-type corps can.
At the end rich get richer, poor get poorer and the middle class gets, well... r4ped to not become rich.

 

[Mssquirrel]

Thank you peeps, this all just confirms my theory that $100k/yr isn't the amount that would allow you to "optimize" taxes like millionaires or A-type corps can.
At the end rich get richer, poor get poorer and the middle class gets, well... r4ped to not become rich.

I mean you can optimize tax but if you are living in a tax hell and you don't want to move and you want to have buy a house in the long term, you have to understand that you are taking a risk. Every year technology and regulations get worse so they will have you more controlled. If your plan is to live there long term you have to think long term too.

 

[JackAlabama]

Thank you peeps, this all just confirms my theory that $100k/yr isn't the amount that would allow you to "optimize" taxes like millionaires or A-type corps can.
At the end rich get richer, poor get poorer and the middle class gets, well... r4ped to not become rich.

You can optimize - In your situation you will move to a tax free place or where this kind of territorial income is exempted like it is in Panama for example, then you do not have time zone issues either and they speak same language as in Spain.

What you cannot do, is remaining in Spain for 365 days. You could spend half there and half in your country of choice which is favorable for what you try to achieve.

 

[tolstoy]

Thank you peeps, this all just confirms my theory that $100k/yr isn't the amount that would allow you to "optimize" taxes like millionaires or A-type corps can.
At the end rich get richer, poor get poorer and the middle class gets, well... r4ped to not become rich.

Think about the Portugal NHR + Seychelles IBC Crypto solution as it is the best for you. There is no other way. The Middle Class needs to have ingenuity to survive the Financial Jungle.

 

[FixieHartmann]

Moving to Spain and expect to pay low taxes with a 6 figure salary is like going to a favela in Rio with two gold rolexes on each arm and expect to have zero issues. Just move out of there or accept the situation, there is nothing you can you about it. Why the heck do you think everyone who can, relocates?

Only giant corporations that can do the SICAV (hedge fund) scheme or companies that have physical products that are produced in Spain, or services that are for Spanish benefits (like consulting about Spanish law etc) will stay, as they have no choice.

Spain is a great place if you make a normal salary (or whats considered normal there). Otherwise be prepared to be r4ped. Do not piss their IRS off as yeah they aren't great at detecting stuff but if they do, they will not leave you alone, not ever. You may win (they lose 50% of the cases), but they will make your life extremely miserable in the process (as that's their strategy so you settle to pay before the process is carried on), and will continue to hunt you with audits every year after. And even if you do win, they will appeal to a higher court (they can do this up to 3 times) like they are doing with Xavi Alonso, who's already won twice but that won't settle it. If the loot is big enough, they will hunt down.

Stay away from Spain! Only for vacations! Or be prepared to pay 50% or more, better safe than sorry. You can NOT win against those people, you WILL lose one way or the other (economically, emotionally, mentally, etc) every single time without exception.

Regarding your question, it will not work as you think. If you create a company, for example, if you are a single shareholder, you will be taxed twice. That means your company will get taxed CT of 25%, and then you will personally be attributed 70% of those gains. So if the company makes eg 100k profit, it will pay 25% in taxes. Of the 70k remaining, 70% will be attributed to your personal income tax. This is a scandal but that's just the way it is.

What is your opinion on the new nomad visa with 15% tax? I am considering making use of it but everywhere I look it basically says that Spain is the worst place to pay taxes. Not a great perspective even though 15% and no exit tax (when staying less than 10 years) looks quite good on paper.

 

[bedouin]

What is your opinion on the new nomad visa with 15% tax? I am considering making use of it but everywhere I look it basically says that Spain is the worst place to pay taxes. Not a great perspective even though 15% and no exit tax (when staying less than 10 years) looks quite good on paper.

Dont make any mistakes. Spain -from a tax perspective- is not a friendly country like their neighbors Portugal or Andorra. Spain has a very different tax approach: an inquisitive one. Anything that makes you think otherwise is just an illusion. Why anyone in their right mind would want to ever be under their radar willingly, "nomad visa'd" or not, is truly beyond me.

Enjoy the sangrias, hot weather, nice cities... just make sure you gtfo prior to spending over 3 months there.

What you cannot do, is remaining in Spain for 365 days. You could spend half there and half in your country of choice which is favorable for what you try to achieve.

While true, I would not play the "Hah, beat ya, was only there 175 days, BIATCH!" game with Spain. The whole "innocent until proven guilty" does not work that way with them. They WILL seize your assets until they can or can't prove that you were there for more than 183 days, and make your life incredibly miserable in the process, even if you do win.

My advice is to avoid taking risks. If you have never been under their radar, then keep it that way. Once you're under their scope, you need to exit all the way, the 179 day trick is just begging for trouble.

Let get things clear: we are talking about THE BIGGEST TAX HELL ON THE PLANET. If your net worth is anywhere near juicy levels, you better stay away.

 

[karishi]

I don't qualify for Beckham Law because I already live in Spain. And I mentioned this isn't a Spanish company. I have a consulting agreement with the company so I'd have to become a self-employed and being self-employed is another point to be disqualified from Beckham's law.

What about receiving a portion of my salary in crypto (let's assume the company is okay sending USDC into a cold wallet) and use crypto.com card or ledger card for my daily expenses? And the other portion would be taxable as self-employed.

Are you a spanish resident and are you paying any taxes as of now?The Hacienda is aggressive, and if you plan to live long term and have a family in spain, you are likely to face problems, as usual it's a risk/reward thing.
One setup that could work for you is getting a visa in Dubai as a freelancer or something like that, get paid 70% in dubai and 30% in spain, never ever bring money from Dubai to spain. You would be considered a resident in Dubai, for the time being, there would be no CRS ( unless they change their minds, which they could ) but you could not spend your dubai money in spain, so forget about buying a 600k house in Ibiza. In general I would suggest to live as a ghost in spain, have nothing, no bank account, no house contract ( pay cash ), nothing, but of course it depends on what are your life plans. If you plan to be a Spanish resident, so live in spain, there is not much you can do legally, I mean, even if you declare 30%, than you would need to have a lifestyle that suits that money. And if your life plan is living in spain and the haceinda catches you, you are fucked. If spain is "just one place", well, live like a ghost and if the hacienda starts making questions, leave spain and never go back again.

 

[A1988]

Thank you peeps, this all just confirms my theory that $100k/yr isn't the amount that would allow you to "optimize" taxes like millionaires or A-type corps can.
At the end rich get richer, poor get poorer and the middle class gets, well... r4ped to not become rich.

wait, canary islands have a new tax scheme where you pay 4%, did you look that up?

 

[uplana]

wait, canary islands have a new tax scheme where you pay 4%, did you look that up?

That's an interesting point, any link to something official where you have read it?

 

[A1988]

That's an interesting point, any link to something official where you have read it?

https://www.tas-consultoria.com/blog-en/tax-advantages-offered-by-the-canary-islands/You can also maybe find more reliable sources, but thats the best way you can optimise your taxes in spain

 

[Marzio]

canary islands have a new tax scheme where you pay 4%

ZEC isn't new and require at least 75K investment + 1 resident director + 3 people hire full time there.

 

[A1988]

ZEC isn't new and require at least 75K investment + 1 resident director + 3 people hire full time there.

he said he is receiving 100k a year, you can do the math, its still better than paying 40-45k in taxes from that 100k he is receiving. He will probably pay way less if he complies with this structure in canary islands.

 

[Marzio]

I'm not saying it can't be done, i'm saying that the costs are higher and so the skills required to run a business with at least 3 full time people.

3 full time people will cost you at the very least 70K year.

100K - 70K salaries = 30K (and i'm not counting other expenses)

Is it better to pay 4% tax on 30K in the Canary Islands or 10% in Andorra on 100K?

You do the math.

Of course those 3 people hired will produce more income but it's impossibile to predict beforehand how much that growth will be and if it makes sense to have them onboard.

 

[bamboozlethemall]

Actually this NHR in Portugal + Crypto is the best solution.