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Thread: Work remote in Spain for a US employer on a non-lucrative visa: Where to pay taxes?

  1. #1
    Junior Member
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    Sep 2015
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    Default Work remote in Spain for a US employer on a non-lucrative visa: Where to pay taxes?

    Hello,

    I'm moving from the US to Spain, where I will work from home for my US employer, who will pay me in my US bank account. I have already obtained a non-lucrative visa for Spain.

    I know with a non-lucrative visa, you may not work in Spain. But I've read that this visa is only meant to prevent you from taking a job from the Spanish economy, and freelancers or remote employees of foreign companies may use it. I was very clear about my situation at my local Spanish consulate when applying for the visa, and they granted me the visa.

    But I don't know if I must pay income tax in Spain. I read that after 183 days in Spain, the Spanish tax authority will charge you income tax on world-wide income. But is this also true for people on a non-lucrative visa? The only information I can find says that residents with this visa will be taxed on capital gains from investments and "passive income", but they will not be taxed on pension payments (according to the US-Spain tax treaty). I think those are the two main types of people who use the non-lucrative visa: independently wealthy people and pensioners. But what about my situation? Must I pay Spanish income tax, despite being paid in the US by a US employer, and being ineligible for certain Spanish benefits on this visa such as public health care?

    I definitely must pay US income tax. If I must also pay Spanish income tax, the US-Spain tax treaty says that one must first pay one country, and then deduct that amount of tax when paying the second country. So if I pay Spain first, I'll probably owe the US nothing since taxes are generally higher in Spain. If I pay the US first, I'll probably still owe Spain some. But which country do I pay first? Since I'll be paid in the US, they will definitely withhold money from my salary for taxes. But the IRS (US tax authority) is also very clear that money earned while living in another country is "foreign" income, even if you're paid in the US by a US employer. So... which country gets paid their taxes first?

    I'd be very grateful to hear from anyone who has some insight here.

  2. #2
    Junior Member
    Join Date
    Oct 2015
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    2

    Default

    Hi SeanM,

    Unfortunately, I don't have an answer to your question, but your question did spark my interest. I'm a freelancer here in the States looking to move back to Spain for an extended period. I'd like to apply for the non-lucrative visa but am having trouble understanding the requirement about income. I don't have the savings to support myself for a year, though I do have sufficient monthly income. What exactly did you say to the Consulate when you explained your similiar situation to them?

    Thanks!
    Gabe

  3. #3
    Junior Member
    Join Date
    May 2017
    Posts
    7

    Default

    I'd also be interested in knowing more about non-lucrative visas, anyone can give more info?

  4. #4

    Default

    Hello Jim

    There is plenty of information about the Non Lucrative visa application on the Internet. Also, Spanish consular offices´ websites include a visa information section containing links to official websites listing the requirements and documentation request.

    The most important requirements are that you have clean medical and criminal records, that you are able to cover your living expenses ( and your relatives´ dependent on you, if you want to include them in the application), that you have hired private medical cover in Spain with full cover ( all medical specialties and hospitalization ) and that you have rented a property, or already own one where you and your family will reside. The major issues an applicant has are related to the financial situation and how to show their solvency, which vary among applicants.

    The best solution is to ask for professional advice as they will check whether your profile meets the requirements and will confirm the financial documentation you need to prepare.

    You can read useful information here. Also, please feel free to email us if you need more detailed information about this type of permit application.

    Regards,
    Patricia Martin
    Legal Assistant at Lawbird
    Check My Profile

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