Digitization and the pandemic have accelerated the transformation of the global labor market and the introduction of new forms of work, whether teleworking from home or working remotely from any country. More and more companies are offering both modalities to their workers while more and more professionals choose to make the leap to digital nomad. They are professionals who, no matter where in the world, work for their company or their client, which may be 8,000 kilometers away.
Current situation
In Spain, teleworking from the second residence has skyrocketed in the last year. Several autonomous communities are adapting and adopting measures to attract Spanish teleworkers and foreign remote workers. In Andalucia, the province of Malaga is one of the best positioned in the country as a pole of attraction for digital nomads and both the Provincial Council and the City Council are working in this direction.
Beyond the advantages of working while traveling the world, this international mobility is accompanied by a specific taxation that any digital nomad or worker who carries out his professional activity remotely from Spain must know when filing his taxes to avoid tax losses. head.
The change of habitual residence implies a series of fiscal obligations. The remote work model does not force the worker to have to settle in a specific city and this geographical freedom is the most valued but also, at times, the most tedious because it implies becoming familiar with the tax regulations of each country to which they are displaces. And it is not always easy.
Where do I pay taxation if I am a digital nomad?
Whether you are a digital nomad or not, we are all tax residents in some country in the world. That is, you have to pay taxes in a specific place, be it the country where you spent the most time last year, where you were born or another. So, what are the options?
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Tax residence
The first important concept to know is tax residence. Each country defines it at its convenience and regulates it internally. To avoid conflicts and double taxation there are double taxation treaties. Spain has signed agreements with 103 countries to avoid double taxation, which are bilateral agreements that establish a framework for tax action to prevent a citizen from paying taxes in two countries at the same time.
The 183 day limit in Spain
To date, in Spain, pending the approval of the digital nomad visa, at the time of making the income statement, the digital nomad must have a record of the calculation of days resided in each autonomous community of the country during the previous year. It is advisable to have this record to determine whether or not the person was a resident in Spain that year (in case they must submit the income tax return, or the Non-Resident Income Tax) and also to determine the autonomous community where they have your habitual residence.
In any case, the taxpayer's tax residence in Spain is acquired by residing a minimum of 183 days during the calendar year in the country or if the bulk of their professional activity or economic interests is located in Spain. In addition, it is also presumed that the taxpayer has her habitual residence in Spain when her spouse and the children who depend on him / her reside in Spain and the couple is not legally separated.
Where do I declare my taxes if I reside in Spain but my client is abroad?
Tax residents in Spain must pay taxes in Spain for all their income, including those generated abroad. A practical case: If a remote worker resides in Spain and works for a foreign company, s/he must declare all the income it obtains regardless of whether it comes from Spain or from another country. If the resident worker in Spain has been abroad for more than 183 days, the Treasury will consider him/her a ‘non-resident in Spain’ for which s/he must file a Non-Resident Income Tax return.
With regard to stays abroad, it is necessary to take into account when making the tax declaration whether or not there is a double taxation agreement in the country or countries in which you have stayed that year outside of Spain.
In the event that there is no double taxation agreement between Spain and the foreign country where they have been for a while, the worker must pay taxes in Spain for the income he has obtained, regardless of whether he is also taxed in another country. If there is an agreement between both countries, the worker may avail himself of what is stipulated in said official document to see where he must pay taxes and avoid double taxation.
What happens if I have lived in several autonomous communities of Spain in the same year?
Personal income tax is a personal tax and must be paid in the country and the autonomous community where the taxpayer's tax domicile is, regardless of where their income or income comes from. For this reason, legal experts recommend local registration ("padrón"). Each autonomous community in Spain has an autonomous scale and its own tax deductions.
In the case of the self-employed teleworker, they must communicate the transfer of tax residence to the AEAT and Social Security since they obliged to state where they are carriying out their activity.
I'm leaving Spain. How do I prove my new tax residence?
If you move indefinitely outside of Spain, Spanish law does not accept fragmentation of tax periods due to change of residence. In order for you to stop being a tax resident in Spain and to be able to pay taxes abroad, you must provide the certificate of tax residence of the country in which you meet the requirements of being considered a tax resident.
There are many people who go abroad with a work contract and an address and do not communicate it to the Tax Agency, although it is mandatory. The change of tax residence is made by presenting the so-called model 030 and the certificate of tax resident in the new country.
Don't go yet! The digital nomad visa included in the Law to promote Startups, whose Draft Law was introduced four months ago, will soon be approved.
