Ltd in UK, living in Belgium, first contract in Spain :)

[Tiresias]

Thanks all for answering,

in fact the reasons of this strange use case are the following:

0. I would like to stay for personal reasons (kids school etc) some more time in belgium

1. why in uk and not belgium ?
a. corporate taxes in belgium are 31%, while they are 20% in UK.
b. the fact that indeed u need 18K up front for the capital (i can deal with it but still thats easier in uk).
c. the fact that I expect to do more contracts in uk after spain


2. why not in spain ?
a. corporate tax are 30% in spain
b. I expect to do more contracts in uk after spain (see 1.c)



These are the reasons.

[stek]

Thanks all for answering,

in fact the reasons of this strange use case are the following:

0. I would like to stay for personal reasons (kids school etc) some more time in belgium

1. why in uk and not belgium ?
a. corporate taxes in belgium are 31%, while they are 20% in UK.
b. the fact that indeed u need 18K up front for the capital (i can deal with it but still thats easier in uk).
c. the fact that I expect to do more contracts in uk after spain


2. why not in spain ?
a. corporate tax are 30% in spain
b. I expect to do more contracts in uk after spain (see 1.c)



These are the reasons.

Surely tho the tax is due where the work is done? Personal and corporate especially one-man operations?

[SueEllen]

Surely tho the tax is due where the work is done? Personal and corporate especially one-man operations?

Yep.

So the tax difference is a mute point.

The only bother is doing company reporting to companies house.

[ASB]

Simply incorporating away from where controlled doesnt really pass a sanity check. There are extensive controlled foreign company rules in most eu states. The penalties for non compliance are generally harsh.

[ASB]

Simply incorporating away from where controlled doesnt really pass a sanity check. There are extensive controlled foreign company rules in most eu states. The penalties for non compliance are generally harsh.

[BlasterBates]

If the UK Ltd company does business only Spain and not in Belgium, it will need to be registered in Spain. It does not need to be registered in Belgium, provided that you don't run your business whilst you are in Belgium. That should be easy to demonstrate if you spend all your time in Spain.

Of course income from the UK ltd will need to be declared in Belgium as well as Spain, where it may be subject to additional taxes.

When you work cross border you will need a local Belgian accountant and a Spanish accountant.

Both the Belgian and Spanish tax authorities will be enquiring about your business and your tax residency, so you need to keep proof of travel and whereabouts. If you have a partner then at least your tax residency will be easily established. If not then you need further proof of your social connections.

This is not straightforward.

[Tiresias]

Corporate tax shall be done in UK (20%)
Income Tax in the country where the project is (spain),

I dont think there is any issue here but obviously i will need an accountant and some expert,
(the double tax relief shall also work, but for this 3 parties schema i am less than sure ... i would expect only to pay income tx in spain and corporate in uk, but who knows)

[ASB]

Why do you think the company will be uk resident.? From your description that is unlikely. Under self assessment you are expected to get it right.

dtas can have unexpected consequences and there can be holes in then.

an example is my corporate invoices had 20% withholding taxes handed over. The Portuguese authorities issued a certificate for that amount as personal income tax paid by me.

however I didnt have any personal income which was taxed, since most of it was dividend income to claim that against.

I am not saying you will have a similar issue. Just pointing out unexpected thjngs can happen.

[tomtomagain]

Corporate tax shall be done in UK (20%)
Income Tax in the country where the project is (spain),

I dont think there is any issue here but obviously i will need an accountant and some expert,
(the double tax relief shall also work, but for this 3 parties schema i am less than sure ... i would expect only to pay income tx in spain and corporate in uk, but who knows)

Funny isn't it. You want to live in Belgium for the lifestyle. Spain for the work and the UK for tax purposes.

If you don't live in the UK and don't wish to contribute to the Belgium or Spanish tax authorities why not register in the Cayman islands and pay 0%?

[BlasterBates]

Corporate tax shall be done in UK (20%)
Income Tax in the country where the project is (spain),

I dont think there is any issue here but obviously i will need an accountant and some expert,
(the double tax relief shall also work, but for this 3 parties schema i am less than sure ... i would expect only to pay income tx in spain and corporate in uk, but who knows)

You will not be paying corporate tax in the UK, you will be paying that in Spain. You need to register your business in Spain and you need to keep a set of accounts for your Spanish business activities.

You need to see a Spanish accountant.

A business can register itself in several European countries, and needs to pay corporate tax on earnings proportional to business it does in each country.

If you have for example a UK contract and a Spanish contract lets say 50% of turnover in each country, you will be expected to pay UK corporate tax on 50% of your earnings and Spanish corporate tax on the other 50%.

The general rule is you pay tax where your business activity is, and there is no way around that.

If you develop the software in the UK, i.e. you travel to the UK and do the work there and simply deliver what you have produced to your Spanish client, then it is a UK based business subject to UK tax, but that would also apply to your PAYE.