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Working for a UK Employer in Spain

- Updated: 11/11/2009

If you have been lucky enough to find employment working for a UK registered company in Spain – or even if your current employer is relocating you from the UK to Spain, you need to be aware of the implications.

Working for a UK Employer in Spain

Employees that have been contracted by a UK company, but to be located and working in Spain will be subject to the Spanish law regarding the Social Security contributions before they are able to commence with any work.

The Seguridad Social - Reglamentos Comunitarios (which is the government agency that oversees the employees of a foreign company in Spain) state that: "Workers contracted by a foreign business with the aim of carrying on their activity in Spain will be subject to Spanish legislation regarding the Social Security contributions before they are contracted to work. These workers are not considered displaced workers under the social security act, and are subject to the legislation of the country in which they carry out their activity. The foreign business must apply to the corresponding Tesoreria General (The agency where you apply for a social security contribution account number) to register the business with the Spanish social security and hence subsequently register the worker with the Spanish social security." So basically they breaking the problem down into 2 very simple points :

A.) As an employee of any company working here in Spain you are required to have social security coverage in order to start work.

B.) In order to be fully covered here in Spain you need to contribute into the social security system.

As in any EU country, before you can start to work both you and your employee need to be in a position where you are both paying your respective share of your contributions into that Country’s system. In the UK it is the Employer that takes the responsibility for the collection of these contributions – and it is no different in Spain, regardless of whether you intend to work for Spanish or foreign employer in Spain, social security contributions are deducted at source and then paid by the employer to the Spanish social security system. In the UK employers have an reference number to which each employee that they have are registered to, and once again it works the same way here in Spain. The social security doesn’t charge for a foreign business to register as an employer of staff in Spain. The intention here is obviously to reduce any illegal workers, and to ensure that all employees rights are protected and full social security can be extended to everybody working here in Spain. The registration process is something that your Asesor will be able to assist you with.

Comment on this Article

 
If you work for a UK based large company in Spain for more that 8 years, are you legally entitled to a Spanish contract ? My company are trying to move me from my home in Spain where I have worked for them on a UK contract.
Susan Murray - Sat 17th Aug 2013
I'm English and I'm a tax resident in Spain. I've had teaching contracts but I've never been autónomo. I want to start selling teaching software online but I can't afford to be autónomo and needing to charge IVA would be disadvantageous. I would like to know whether it would be possible to set up a UK company and pay myself a salary here in Spain. Ideally - avoiding Spain's unfriendly IVA rules and the cuota de autónomos; ideally paying all company profit to myself as a contracted employee and so only pay Spanish social security and Spanish income tax (above the personal allowance and earned income allowance); ideally being able to accept Paypal payments in €s and use a Spanish bank account and to pay my salary from that account (to avoid various currency conversion charges). Is all or any of this possible to do legally? I have no idea if I will make any money, so being autónomo here in Spain just makes no sense whatsoever if I have to pay out 265€ a month even with no income. Thanks!
Steven - Mon 15th Jul 2013
Hi I own a UK Ltd company and we have been contracted by a bar in Marbella to provide promotional services during the summer months. As part of this we will be sending 3 of our staff to work there for a period of 3 months, handing out flyers, getting people into the bars, that type of thing. All of these staff members are currently employed by us in UK and we deduct tax & NI in the UK in the usual manner. In as simple terms as possible, do we need to do anything in Spain to register as an employer, register the employees, VAT etc... ? At the moment we intend to just pay these people as our staff as they are working for us and will not be working for a Spanish company. Thanks Ian
Ian Bavill - Thu 9th May 2013
Jeremy : As a US Citizen working and Paying taxes in the UK you would not be required to pay further taxes on your income here in Spain. You will be "Fiscally Resident" in the UK, but physically resident in Spain. You will still be required to apply for Residency for permission to live here in Spain, but providing you can show an income this should be problem free. Please contact me if you should require any further assistance in this matter Perez Legal Group
Raquel Perez Legal Group - Thu 24th Jan 2013
Hi - I am an American expat currently living in Japan but am considering taking a position that is meant to be based in London with my current company. However, my partner is Spanish and we would like to be based in Spain. My company has UK operations today but not in Spain. My company is fine to accommodate me being based in Spain but I need to understand if there are any tax implications. I will make approximately EUR 150,000 per year. If I am a Spanish resident but am paid out of the UK, I know I'll still have to pay US taxes, and UK taxes but will I need to pay Spain taxes? Any recommendations for a tax adviser I can consult? Thanks!
Jeremy - Thu 24th Jan 2013
@Alex - Remote working is becoming more and more a popular choice for Employers and Employees, however taxation is a bit of a grey area. Our understanding is as long as you pay tax in one European state then you should NOT have to pay tax in another. Spain has a double taxation treaty with the UK so IF you are taxed by Spain you can claim it back as long as you are paying tax in the UK and vise versa. Employers will only need to pay what they do in the UK to the UK authorities, IF they are paying you based on a UK contract. A popular Irish airline works like this. You should seek advice from the UK tax authorities.
Tumbit Admin - Thu 27th Sep 2012
Hello, I am a French national and I have been living (and working) in London for almost 5 years. I may be offered a new job by a British company (headquartered in London but with no office in Spain) and would like to negotiate living and working from Barcelona. I know the UK system quite well in terms of income tax and national insurance but know nothing about the Spanish one and would welcome your assistance! I understand from some of the posts below that I would have, as a Spanish resident, to pay my income and social security taxes in Spain as well as in the UK hence my questions: - assuming an annual basic salary of £55,000, could you give me a rough idea of my take home salary i.e. what would remain once I have paid all taxes? - aren't there any agreements in place to avoid people being taxed twice (both by Spain and the UK)? - from a company's standpoint, what would the employer have to pay to the Spanish and UK tax authorities or governments? Thanks for your help
Alex Megnin - Wed 26th Sep 2012
I am an Italian leaving in London for the past 17 years. I have recently been offered a position with my company in Spain and planning to move there while renting out my house in London. I will be travelling to Madrid every week and move to Italy. I would like to know if you could provide specific advices on this topic with regards to the best possible approach for tax residence. Thanks
Luigi - Wed 22th Aug 2012
Definitely I will. Thank you for your advice :)
Ana Rodriguez-davies - Wed 18th Jan 2012

This isn't necessarily as easy as you might think.

- For one, as a Spanish Resident you will obliged to pay yearly taxes - regardless of where you earned the income from, and will also either need to pay into the Social Security system OR take out private healthcare, as you will be entitled to nothing without it.

Furthermore, you will also be obliged to pay your taxes and SS in the UK.

- This is deffinately one of those occassions when spending £200 on some good quality tax advice will pay off, and they will be able to tell you exactly what your obligations are, and ways in which you can limit them.

Tumbit - Admin - Wed 18th Jan 2012
Thank you so much for your prompt response!.. They are two Directors in the company so his business partner will stay in the UK and the company will be based in the UK only, but he will be resident in Madrid. I guess he will to pay his taxes in the UK then. Kind regards.
Ana Rodriguez-davies - Wed 18th Jan 2012
Ana, Yes - this is possible, although how it all works will depend largely on where you are legally resident, and where you pay your taxes and social security contributions. It 'can' be a bit of a minefield as a lot can vary depending on your exact personal circumstances, and I would strongly recommend that you spoke with a Tax Specialist experienced in these matters.
Tumbit - Admin - Tue 17th Jan 2012
Thanks. My husband has his own company in the UK. His job allows him to work from home so we are planning to live in Spain although he will carry working for the UK. Is this possible?
Ana Rodriguez- Davies - Tue 17th Jan 2012
Albert : No.... we are a website concerned exclusively with Spain and not Ireland, and secondly we are not a Government body or agency. For some reason we get a lot of questions like this - especially from the Philipines. I would urge you to be careful here and not pay any money in advance as there are a number of scams around surrounding this issue.
Tumbit - Admin - Fri 30th Sep 2011
Do you process work permits for foreigners who wish to get employed in Ireland
Albert - Fri 30th Sep 2011
Sorry for the delay in replying : A Professional Tax Advisor would require a little more information before being able to provide you with useful and accurate advice. For example, do you both intend to Move to Spain and take up Residency here, or live mostly in the UK ? Also, what is your Nationality ? Do you have any other assets in the UK, Spain or any other country ? - If you can tell me what area of Spain you may be moving to I can point you in the direction of finding a professional Tax Advisor that will be able to be of service to you.
Tumbit - Admin - Tue 23rd Nov 2010
Please can anyone help with a query that I have as I have conflicting information. Basically, we are British and currently live in the UK. My Husband has been offered a job in Spain which pays between £50,000-55,000 per year. Can you tell me how much tax he will have to pay on this please as we are trying to figure out whether we can afford to take this offer. Thank you.
Emma - Tue 14th Sep 2010