Spain digital nomad visa

[oliverson]

I don't think retaining a UK limited would be a very good approach for a variety of reasons. You'd probably want to start afresh in Spain, which would also come with overheads (transferring contracts etc.). If the reason for retaining the UK company is to hide your working location from existing clients, that probably isn't going to work out well.

I'd agree with that and there is probably an option to go perm with the current client, if I could stomach it, which would fix some of those issues, notably N.I. on the salary, but the other issues would still remain. My Ltd will still be functioning, it will keep honouring the BBL, car lease, etc. The car would still be allocated to me as an employee of that company, perhaps a second job. Whether that would make any difference to the BIK as seen by the Spanish tax authorities I'm not sure.

I think if my situation was simpler, i.e. an employee of a non-Spanish company, living at home with my parents, etc. and I could just start afresh as you say, it would be attractive, but I have too much baggage I believe.

[jamesbrown]

I don't think retaining a UK limited would be a very good approach for a variety of reasons. You'd probably want to start afresh in Spain, which would also come with overheads (transferring contracts etc.). If the reason for retaining the UK company is to hide your working location from existing clients, that probably isn't going to work out well.

[oliverson]

Enticed as I am by this visa, I think there will be a number of issues....

1. To my Ltd company

1. Given I'd be switching from small salary/large dividends to salary only, with a view to avoiding ANY Corporation Tax, the Ltd would now have to pay Employer N.I. and maybe 'other taxes' associated with employing somebody. The N.I. alone would be around 15%.
2. Ongoing depletion of bank balance due to regular payments (BBL, car lease, etc)
3. Lack of cash flowing into the company bound to upset the bank

2. To me

1. I would then be benefitting from paying just 15% Income Tax but I'm sure there will be other 'national insurance' like taxes to pay
2. We never got married. That would mean my long-term partner cannot share the same long-term stay benefits that I could
3. What about my company car? I've read that these are subject to VAT payments by the employee in Spain. What about the terms of the lease? I doubt I can just take the car abroad long-term. What about the insurance on it? Sure I can take it abroad but that's a temporary arrangement. What about my UK driving license?
4. Would I have to work in Spain 'exclusively'? Would this in effect preclude me from returning to the UK and working there some of the time?
5. What about the UK property? Difficulty/unwise leaving it unattended for long periods of time. Renting it out would make 4. above unattractive

And I'm sure there are a great deal other issues to contend with that I've not thought about.

So, 'in theory' it all seems like a good idea but when you think about it in more detail, I'm not too sure.

[bloatymcbloat]

I'm also thinking of this...similar reasons to what others have mentioned.

So is the theory that providing you unregister as a UK tax resident (which I think is doable if your out of the country for >183 days) , you would only pay your UK corp tax but salary is paid locally which would be 15% in Spain with the digital nomad visa?

I guess if your paying a flat 15% surely you'd pull all your earnings as salary as you can and deduct against CT to get it as close to nil?

Sounds too good to be true.

[AreYouGoingToWorkToday]

I read it as
Non-Resident: Workers and companies who receive income in Spain but cannot stay there for more than 183 days.
Digital nomads (with the visa): Benefit from the same tax rate of 15 percent, limited only throughout the first four years of their stay.

So the 15% tax rate applies for the first four years. I guess it requires a Spanish company to be set up and closing the UK one?

[DigitalUser]

That does sound odd, which article did you see this? There must be an official document they voted on of the proposed legislation?

https://www.schengenvisainfo.com/new...axes-for-them/

It might also be how I'm reading the statement around the 183 day rule which is an misinterpretation. Happy to be corrected on this...

[Unix]

There are actually quite a few digital nomad options
https://nomadgirl.co/countries-with-...l-nomad-visas/

[Unix]

My only slight concern (I've been tracking this for over a year as we're planning to relocate) is the 15% only kicks in if you spend less than 183 days a year there. That strikes me as somewhat odd, but I've seen that on a few articles now

That does sound odd, which article did you see this? There must be an official document they voted on of the proposed legislation?

[DigitalUser]

This is very interesting, especially to me as I already have a property in Spain:

https://www.euronews.com/travel/2022...ay-for-5-years

The law hasn't been passed yet (early 2023 supposedly) and I'd need to see the detail but the thought of paying a flat rate of 15% tax, compared to 25% corp. tax + 8.5% dividend tax is very appealing. I'm not paying for a bunch of covid support I didn't receive.

Thoughts?

My only slight concern (I've been tracking this for over a year as we're planning to relocate) is the 15% only kicks in if you spend less than 183 days a year there. That strikes me as somewhat odd, but I've seen that on a few articles now

[NotAllThere]

Covid support should have been loan based, repayable over the long term only by those who received the support.

You do understand that essentially there's little difference between taxes and government loan repayments, except for who pays? You as a reasonable well paid person will, through taxation, be paying off your government loan. Here's a gold star for your achievement.